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The condensed form of Nordstrop Companys flexible budget for manufacturing overhead follows:

	Cost Formula			Machine-Hours
Overhead Costs	(per machine-hour)			5,500		6,500		7,500
Variable cost	$	1.75		$	9,625	$	11,375	$	13,125
Fixed cost					15,400		15,400		15,400
Total overhead cost				$	25,025	$	26,775	$	28,525

The following information is available for a recent period:

The denominator activity of 5,500 machine-hours was chosen to compute the predetermined overhead rate.

At the 5,500 standard machine-hours level of activity, the company should produce 1,100 units of product.

The companys actual operating results were as follows:

Number of units produced		1,400
Actual machine-hours		6,700
Actual variable overhead costs	$	10,586
Actual fixed overhead costs	$	19,000

Required:

1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2 decimal places.)

Predetermined Overhead Rate	....	Per MH
Variable Rate		Per MH
Fixed Rate		Per MH

2. What were the standard hours allowed for the years actual output? (Do not round intermediate calculations.)

Standard hours of actual production

...../MHs

3. Compute the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances. (Do not round intermediate calculations. Round your answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

Variable overhead Spending varience	....	.....
Variable overhead efficiency varience
Fixed overhead budget varience
Fixed overhead variable varience

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