Baird Company makes Polish sausage. It applied manufacturing overhead to production based on standard direct labor-hours.According to the company's planning budget, the following manufacturing overhead costs should be incurred at an activity level of27,000 labor-hours (the denominator activity level):Variable manufacturing overhead costFixed manufacturing overhead costTotal manufacturing overhead cost$ 135,000189,000$ 324,000During the most recent year, the following operating results were recorded:Activity:Actual labor-hours workedStandard labor-hours allowed for the actual outputCost:Actual variable manufacturing overhead cost incurredActual fixed manufacturing overhead cost incurred24,00025,000$ 156,000$ 168,750At the end of the year, the company's Manufacturing Overhead account contained the following data:Manufacturing OverheadDebitCreditActual324,750 Applied300,00024,750Management would like to determine the cause of the $24,750 underapplied overhead.Required:1. Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements.2. Show how the $300,000 Applied figure in the Manufacturing Overhead account was computed.3. Break down the $24,750 underapplied overhead into four components:1. variable overhead rate variance,2. variable overhead efficiency variance,3. fixed overhead budget variance, and4. fixed overhead volume variance.

Name: Baird Company makes Polish sausage. It applied manufacturing overhead
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Baird Company makes Polish sausage. It applied manufacturing overhead to production based on standard direct labor-hours.According to the company's planning budget, the following manufacturing overhead costs should be incurred at an activity level o