# 31 everjoice company makes clocks the fixed overhead costs for 20×5 total 720 000 th 4309458

31) Everjoice Company makes clocks. The fixed overhead costs for 20X5 total \$720,000. The company uses direct labor-hours for fixed overhead allocation and anticipates 240,000 hours during the year for 480,000 units. An equal number of units are budgeted for each month.

During June, 42,000 clocks were produced and \$63,000 were spent on fixed overhead.

Required:

a.Determine the fixed overhead rate for 20X5 based on units of input.

b.Determine the fixed overhead static-budget variance for June.

c.Determine the production-volume overhead variance for June.

32) Brown Company makes watches. The fixed overhead costs for 2011 total \$324,000. The company uses direct labor-hours for fixed overhead allocation and anticipates 10,800 hours during the year for 540,000 units. An equal number of units are budgeted for each month.

During October, 48,000 watches were produced and \$28,000 was spent on fixed overhead.

Required:

a.Determine the fixed overhead rate for 2011 based on the units of input.

b.Determine the fixed overhead static-budget variance for October.

c.Determine the production-volume overhead variance for October.

33) Explain why there is no efficiency variance for fixed manufacturing overhead costs.

34) How is a budgeted fixed overhead cost rate calculated?

35) Explain why there is no production-volume variance for variable manufacturing overhead costs.

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