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The Oakleigh Company has the following information available for its production facility for the month of July. The budgeted activity level for fixed manufacturing overhead was estimated to be 48 000 machine hours for the production cycle. Actual machine hours for the period were 50 000, which resulted in the completion of 9900 units.
Material purchased (210 000 items)
$819 000
Material quantity variance
$39 600 U
Actual labour cost (15 000 hours)
$102 000
Machine hours used
50 000 machine hours
Variable overhead spending variance
$2 500 U
Actual fixed manufacturing overhead
$150 000
Oakleigh’s standard costs per unit are as follows:
Direct material
20 components @ $4 per item
Direct labour
1.5 hours @ $6 per hour
Variable overhead (applied on machine hour basis)
4.8 hours @ $2.50 per hour
Fixed overhead (applied on machine hour basis)
4.8 hours @ $3 per hour
The fixed overhead budget variance is:
The fixed overhead volume variance is:
How much overhead was underapplied or overapplied during July?