Student Name: Marcie DeGiovine Class: BA511 6/1 - 9/30/2013 Problem 11-22 ROWE COMPANY Flexible Budget-Finishing Department

Budgeted direct labor-hours Cost Formula Item per DLH Variable overhead costs: Indirect labor $0.60 Utilities 1.00 Maintenance 0.40 Total variable $2.00 Fixed overhead costs: Supervisory salaries Insurance Depreciation Equipment rental Total fixed Total overhead costs 50,000

Direct Labor-Hours 40,000 50,000 $24,000 40,000 16,000 80,000 $30,000 50,000 20,000 100,000

60,000 $36,000 60,000 24,000 120,000

60,000 5,000 190,000 45,000 300,000 $380,000 Correct! ROWE COMPANY Overhead Rates

60,000 5,000 190,000 45,000 300,000 $400,000 Correct!

60,000 5,000 190,000 45,000 300,000 $420,000 Correct!

Total overhead rate: Total overhead costs Budgeted DLH Total overhead rate Variable overhead rate: Variable overhead costs Budgeted DLH Variable overhead rate Fixed overhead rate: Fixed overhead costs Budgeted DLH Fixed overhead rate

$400,000 50,000 $8.00 Correct! 100,000 50,000 $2.00 Correct! $300,000 50,000 $6.00 Correct!

Student Name: Marcie DeGiovine Class: BA511 6/1 - 9/30/2013 Problem 11-22 ROWE COMPANY Variable Overhead Spending and Efficiency Variances Manufacturing Overhead 385,700 25,700

Actual costs Underapplied overhead

360,000 Applied costs

Analysis of under- or overapplied overhead: Variable overhead variances: Actual hours 46,000 Actual rate $1.95 Standard hours 45,000 Spending Variance Efficiency Variance Fixed overhead variances: Budgeted Fixed OH Cost $300,000 Fixed OH Cost Applied to Work in Process $270,000 $4,000 Favorable $30,000 Unfavorable Standard rate $2.00 Actual hours Actual hours Standard of input of input for output @ actual rate @ std. rate @ std. rate $89,700 $92,000 $90,000 $2,300 Favorable $2,000 Unfavorable

Actual Fixed OH Cost $296,000 Budget Variance Volume Variance

Overhead variances summary: Variable overhead: Spending variance Efficiency variance Fixed overhead: Budget variance Volume variance Underapplied overhead

$2,300 Favorable 2,000 Unfavorable 4,000 Favorable 30,000 Unfavorable $25,700 Correct!

Given Data P11-22: ROWE COMPANY Budget costs for Finishing Department: Variable costs: Direct materials Direct labor Indirect labor Utilities Maintenance Total variable costs Fixed costs: Supervisory salaries Insurance Depreciation Equipment rental Total fixed costs Total budgeted costs Budgeted direct labor-hours Part 3: Actual activities and costs: Actual direct labor-hours worked Standard direct labor-hours allowed Actual variable manufacturing overhead cost incurred Actual fixed manufacturing overhead cost incurred Check figures: (3a) Applied overhead (3b) Volume variance (unfavorable)

$600,000 450,000 30,000 50,000 20,000 1,150,000

60,000 5,000 190,000 45,000 300,000 $1,450,000 50,000

46,000 45,000 $89,700 296,000

$360,000 30,000