LampLight Industries gathered the following information for the month of July:
Overhead flexible budget:
LampLight actually produced 14,000 units in 17,500 machine hours. Total actual overhead cost of $85,500 consisted of $35,000 variable costs and $50,500 fixed costs. The standard variable and fixed overhead rates are based on a master (static)budget of 15,000 units. Assume the allocation base for fixed overhead costs is the number of units.
A. Compute the total manufacturing overhead cost variance.
B. Compute the overhead flexible budget variance.
C. Compute the production volume variance.

Question

LampLight Industries gathered the following information for the month of July:
Overhead flexible budget:
  LampLight actually produced 14,000 units in 17,500 machine hours. Total actual overhead cost of $85,500 consisted of $35,000 variable costs and $50,500 fixed costs. The standard variable and fixed overhead rates are based on a master (static)budget of 15,000 units. Assume the allocation base for fixed overhead costs is the number of units.
A. Compute the total manufacturing overhead cost variance.
B. Compute the overhead flexible budget variance.
C. Compute the production volume variance.

Quizplus · Accepted Answer

The Answer of LampLight Industries gathered the following information for the month of July:
Overhead flexible budget:
  LampLight actually produced 14,000 units in 17,500 machine hours. Total actual overhead cost of $85,500 consisted of $35,000 variable costs and $50,500 fixed costs. The standard variable and fixed overhead rates are based on a master (static)budget of 15,000 units. Assume the allocation base for fixed overhead costs is the number of units.
A. Compute the total manufacturing overhead cost variance.
B. Compute the overhead flexible budget variance.
C. Compute the production volume variance.

LampLight Industries Gathered the Following Information for the Month of July