Pronghorn Company produces one product, a putter called PAR-putter. Pronghorn uses a standard cost system and determines

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Pronghorn Company Produces One Product A Putter Called Par Putter Pronghorn Uses A Standard Cost System And Determines 1 (107.53 KiB) Viewed 41 times

Pronghorn Company produces one product, a putter called PAR-putter. Pronghorn uses a standard cost system and determines that it should take one hour of direct labor to produce one PAR-putter. The normal production capacity for the putter is 100,000 units per year. The total budgeted overhead at normal capacity is $526,000 comprised of $213,000 of variable costs and $313,000 of fixed costs. Pronghorn applies overhead on the basis of direct labor hours. During the current year, the company produced 86,300 putters, paid employees for 89,100 direct labor hours, and incurred variable overhead costs of $186,000 and fixed overhead costs of $313,000. Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answer to 2 decimal places, e.g. 52.75.) Variable Overhead Rate $ Fixed Overhead Rate $ Compute the applied overhead for Pronghorn for the year. Applied Overhead $ Compute the total overhead variance. Identify whether the variance is favorable or unfavorable. Total Overhead Variance $