The standard annual capacity of Jones and Smith Company is 25,000 units per month. Two units can be machined in one hour. The flexible budget for factory overhead at this volume follows: In June, actual production was 22,000 units and actual factory overhead incurred was $258,000.
(1) Calculate the standard application rates for fixed and variable overhead at the standard level of volume in relation to units and machine hours.
(2) Calculate the amount of factory overhead allowed for the actual volume of production in June and the variance between the actual and budgeted factory overhead.

Question

The standard annual capacity of Jones and Smith Company is 25,000 units per month. Two units can be machined in one hour. The flexible budget for factory overhead at this volume follows:  In June, actual production was 22,000 units and actual factory overhead incurred was $258,000.
(1) Calculate the standard application rates for fixed and variable overhead at the standard level of volume in relation to units and machine hours.
(2) Calculate the amount of factory overhead allowed for the actual volume of production in June and the variance between the actual and budgeted factory overhead.

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The Answer of The standard annual capacity of Jones and Smith Company is 25,000 units per month. Two units can be machined in one hour. The flexible budget for factory overhead at this volume follows:  In June, actual production was 22,000 units and actual factory overhead incurred was $258,000.
(1) Calculate the standard application rates for fixed and variable overhead at the standard level of volume in relation to units and machine hours.
(2) Calculate the amount of factory overhead allowed for the actual volume of production in June and the variance between the actual and budgeted factory overhead.

The Standard Annual Capacity of Jones and Smith Company Is