Updike Company – Overhead Variance analysis

| October 3, 2018

Problem II
Updike Company
applies both variable and fixed overhead based on machine hours. The relevant
range of production for this activity is 0 to 10,000 units per month. For
October, 2015, the following monthly information is obtained:
Budgeted and
Standard Amounts:
Machine hours per
unit of output……………………… 3
Variable overhead
per machine hour……………….. $?
Fixed overhead per
machine hour…………………… $2.10
Total overhead per
machine hour…………………… $2.90 (both variable and fixed)
Total budgeted
fixed overhead………………………. $?
Total budgeted
variable overhead…………………… $4,800
Budgeted machine
hours………………………………… ?
Budgeted output in
units………………………………… 2,000
Actual Amounts:
Units
produced……………………………….. 2,200
Machine
hours………………………………… 6,800
Variable
overhead…………………………… $4,900
Fixed
overhead……………………………….. $12,000
Required:
1. Compute the
fixed overhead and variable overhead variances. Compute a total of four
variances.
2. If production
were budgeted at 1,800 units, what would be the amount of the total budgeted
fixed and total budgeted variable overhead costs in the flexible budget for
October?
Fixed –
Variable –
3. Prepare one
journal entry to record the actual fixed overhead cost and the amount applied
to production. Include all of the fixed overhead variances in one journal entry
(standard costing system).

Get a 20 % discount on an order above $ 40
Use the following coupon code:
LOBSTER
Positive SSL