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-   -   Under or over applied overhead variance (https://www.askmehelpdesk.com/showthread.php?t=431631)

  • Jan 5, 2010, 03:06 AM
    kailana
    under or over applied overhead variance
    Budgeted Overheads: $360,000
    Expected Activity (in direct labour hours): 50000
    Actual Activity (in direct labour hours): 51000
    Actual Overheads: $400,000

    Deluxe Regular
    Units Produced: 5000 50000
    Prime Costs: $80,000 $600,000
    Direct Labour Hours: 5000 46000

    What is the predetermined overhead rate based on direct labour hours?
    What is the value of the applied overheads?
    What value is the under or over applied overhead variance?
    What is the unit costs?
  • Jan 8, 2010, 02:44 AM
    srinivas Podugu

    1 Pre determined OH Rate
    Budgeted : 7.20 per Hour
    Actual : 7.84 Per Hour

    4 Unit Cost
    Deluxe 23.84
    Regular 19.22
  • Jan 10, 2010, 11:33 PM
    rehmanvohra

    1. Predetermined OH rate 360000/50000 = $7.20
    2. Applied overheads 51000 x 7.20 = $367200
    3. Applied overheads - Actual overheads = Under/over applied
    367,200 - 400,000 = 32,800 Under applied
    4. Unit costs
    Deluxe: 80,000 + 5000 x 7.20 = 116,000/5000 = $23.20
    Regular: 600,000 + 46000 x 7.20 = 931,200/50000 = $18.624

    Unit costs are always calculated on the basis of applied overheads. Over or under applied overheads are disposed of at the end of the year.

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