Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Standard Standard Price Standard Quantity 1.7 lbs 1.7 hrs (Rate) $1.80 per lb. 12 per hr Unit Cost $ 3.06 Direct materials (clay) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($425,5ee 185,eee units) 28.40 1.7 hrs 1.1 per hr. 1.87 2.3e Barley Hopp had the following actual results last year: Number of units produced and sold Number of pounds of clay used Cost of clay Number of labor hours worked 198,eee 348,280 $ 661,580 235,eee $3,901,eee s 370, eee $ 415,eee Direct labor cost Variable overhead cost Fixed overhead cost Required: 1& 2. Calculate the fixed overhead spending variance and volume variance for Barley Hopp. 3. Calculate the total over- or underapplied fixed manufacturing overhead for Barley Hopp.

Answer 1

Req 1 and 2

Fixed Overhead spending Variance	$ 10,500.00	Favorable
Fixed Overhead Volume Variance	$ 11,500.00	Favorable

Working:

Fixed Overhead spending Variance	=Actual Fixed Overhead - Budgeted Fixed Overhead
	=415000-425500
	-10500
Fixed Overhead Volume Variance	=Applied Fixed Overhead - Budgeted Fixed Overhead
	=(2.3*190000)-425500
	11500

Req. 3

$ 22,000.00

Fixed Overhead

Overapplied

Working:

Overhead /Under applied	= Applied Overhead - Actual Overhead
	=437000-415000
	22000