Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Direct materials (clay) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($273,000 = 105.000 units) Standard Quantity 1.6 lbs. 1.6 hrs. 1.6 hrs. Standard Price (Rate) $ 1.70 per ib. $ 10 per hr. $ 1.1 per hr. Standard Unit Cost $ 2.72 16.00 1.76 2.60 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 Direct labor cost Variable overhead cost Fixed overhead cost 110.000 188.200 $ 301,120 155,000 $ 1.798,000 $ 210,000 $ 275,000 Required: 1. Calculate the fixed overhead spending variance for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Fixed Overhead Spending Variance 2. Calculate the fixed overhead volume variance for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Fixed Overhead Volume Variance 3. Calculate the total over- or underapplied fixed manufacturing overhead for Barley Hopp (Do not round your intermediate calculations.) Fixed overhead

Answer 1

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An. 1. Fixed oH spending variance = Actial fired off - Budgeted Fixed oth = $ 27500 - 27300 = $2000 unfarowable 2 fixed of collume Lariance = Applied fixed of - Budgeted Exed oH * Applied Fixed = 286000 - 2730w = $13060 Falourable oH = logooo units X 2.60 $286.000 3 overapplied oH = Applied oH - Actual oH 286000 - 27500 = llow over applied

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