20 Dec Chelsey Company is planning to produce 2,600,000 p
Chelsey Company is planning to produce 2,600,000 power drills for the coming year. The company uses direct labor hours to assign overhead to products. Each drill require 0.6 standard hour of labor for completion. The total budgeted overhead was $1,981,200. The total fixed overhead budgeted for the coming year is $1,326,000. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. Actual results for the year are: Actual production (units) ..2,560,000 Actual direct labor hours (AH) ..1,535,400 Actual variable overhead $644,100 Actual fixed overhead .$1,330,000 Required: 1. Compute the applied fixed overhead 2. Compute the fixed overhead spending & volume variances. 3. Compute the applied variable overhead. 4. Compute the variable overhead spending and efficiency variances.