Final answer:
The standard variable overhead rate for May is $1.92. The variable-overhead spending variance is $2,000 unfavorable, and the variable-overhead efficiency variance is $2,000 favorable. The fixed-overhead budget variance is $10,000 unfavorable, and the fixed-overhead volume variance is $10,000 unfavorable.
Step-by-step explanation:
The standard variable overhead rate for May can be calculated by dividing the budgeted variable overhead by the standard machine hours allowed for output attained. In this case, the budgeted variable overhead is $48,000 and the standard machine hours allowed for output attained is 25,000. Therefore, the standard variable overhead rate for May is:
$48,000 / 25,000 = $1.92
Hence, the correct answer choice is option A. $2.00 is the closest option to $1.92, so it is the standard variable overhead rate for May.
The variable-overhead spending variance can be calculated by subtracting the actual variable overhead incurred from the budgeted variable overhead. In this case, the budgeted variable overhead is $48,000 and the actual variable overhead incurred is $50,000. Therefore, the variable-overhead spending variance is:
$48,000 - $50,000 = -$2,000
The variable-overhead efficiency variance can be calculated by multiplying the standard variable overhead rate by the difference between the standard machine hours allowed for output attained and the actual machine hours worked. In this case, the standard variable overhead rate is $1.92 (or $2.00) and the difference between the standard machine hours allowed for output attained and the actual machine hours worked is 25,000 - 24,000 = 1,000. Therefore, the variable-overhead efficiency variance is:
$1.92 (or $2.00) × 1,000 = $1,920 (or $2,000)
Hence, the correct answer choice is option D. $2,000 favorable is the closest option to $1,920 (or $2,000) favorable, so it is the variable-overhead efficiency variance.
The fixed-overhead budget variance can be calculated by subtracting the budgeted fixed overhead from the actual fixed overhead incurred. In this case, the budgeted fixed overhead is $240,000 and the actual fixed overhead incurred is $250,000. Therefore, the fixed-overhead budget variance is:
$240,000 - $250,000 = -$10,000
The fixed-overhead volume variance can be calculated by multiplying the standard fixed overhead rate by the difference between the standard machine hours allowed for output attained and the actual machine hours worked. In this case, the standard fixed overhead rate is:
(Budgeted fixed overhead + Fixed-overhead budget variance) / Standard machine hours allowed for output attained
= ($240,000 + -$10,000) / 25,000
= $230,000 / 25,000
= $9.20
The difference between the standard machine hours allowed for output attained and the actual machine hours worked is 25,000 - 24,000 = 1,000. Therefore, the fixed-overhead volume variance is:
$9.20 × 1,000 = $9,200
Hence, the correct answer choice is option E. $10,000 unfavorable is the closest option to $9,200 unfavorable, so it is the fixed-overhead volume variance.