Question - Byrd Company produces one product, a putter called GO- Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 100,000 units per year. The total budgeted overhead at normal capacity is $850,000 comprised of 250.000 of variable costs and $600,000 of fixed costs. Byrd applies overhead on this basic of direct labor hours.
During the current year, Byrd produced 95,000 putters, worked 94,000 direct labor hours, and incurred variable overhead costs of $256,000 and fixed overhead costs of $ 600,000
Instructions
(a) Compute the predetermine variable overhead rate and the predetermines fixed over head rate.
(b) Compute the applied overhead for Byrd for the year.
(c) Compute the total overhead variance.