Budgeted variable overhead cost per direct labor-hour Total budgeted fixed overhead cost per year... Budgeted direct labor-hours (denominator level of activity) Actual direct labor-hours. Standard direct labor-hours aliowed for the actual output. $2 ....... $250,000 .... 39,000 38.000

Budgeted variable overhead cost per direct labor-hour Total budgeted fixed overhead cost per year... Budgeted direct labor-hours (denominator level of activity) Actual direct labor-hours. Standard direct labor-hours aliowed for the actual output. $2 ....... $250,000 .... 39,000 38.000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EA: A company estimates its manufacturing overhead will be $750,000 for the next year. What is the...

See similar textbooks

Related questions

Q: Calculate the predetermined plantwide overhead rate. (Note: Round to the nearest cent.) ii)…

A: Variance is the measurement which is used by the company in order to measure about the costs and…

Q: Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly…

A: SOLUTION D- MANUFACTURING OVERHEAD T ACCOUNT iv 30000…

Q: Terrence Industries charges manufacturing overhead to products by using a predetermined application…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Mills, Inc. uses a standard cost system and provides the following information. E (Click the icon to…

A: Analysis of variance The discrepancy between actual and budgeted data is referred to as variance. In…

Q: Costing system with a single plant ased its predetermined overhead rate for the curre ad cost of…

A: Predetermined overhead rate = Variable overhead per DLH + Fixed overhead per DLH = $5.0 +…

Q: Viger Corporation has a standard cost system in which it applies manufacturing overhead to products…

A: Variable Overhead Rate Variance: It is a variance incurred when there is a difference between actual…

Q: Privack Corporation has a standard cost system in which it applies overhead to products based on the…

A: The question is based on the concept of Cost Accounting.

Q: (d) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: Computing standard overhead allocation rates The following information relates to Morgan, Inc.’s…

Q: The predetermined overhead rate (budgeted overhead rate) is ordinarily developed at the end of the…

A: The above statement is False

Q: a) Refer to the information in Question 1 for data. Now, assume that Juju has decided to use a…

A: Plant wide predetermined overhead rate = Budgeted overhead/Total direct labor hours

Q: Brice Corporation shows the following overhead information for the current period. Actual overhead…

A: Variable overhead price variance = Actual overhead - ( Actual hours x Standard overhead rate )…

Q: Premium, Inc. uses a standard cost system and provides the following information. Static budget…

A: The actual number of units produced=1000 Actual variable overhead=$5000 Actual fixed overhead=$3500…

Q: The following data relate to direct labor costs for the current period: Standard costs 7,500 hours…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: A manufacturing company uses a standard costing system for its product. The company uses a standard…

A: Labor rate variance = (Actual rate per hour - Standard rate per hour)*Actual hours worked Labor…

Q: Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of…

Q: a. Calculate the flexed budget allowances for variable and fixed overhead for April. b. Calculate…

A: a) schedule a Flexed budget allowance: Variable & Fixed Overhead for April Standard hours =…

Q: Quality Company uses a standard cost system and reports the following information for 2024:…

A: Cost Variance: Cost variance is the difference between the actual cost and the budgeted cost.

Q: A company uses a standard costing system and applies overhead to production based on direct…

A: Fixed overhead budget variance = Budgeted fixed overhead - Actual fixed overhead

Q: (d) Post the manufacturing overhead transactions to the Manufacturing Overhead T-account, clearly…

A: Job costing is a system in which costs are recorded for a particular job rather than the entire…

Q: A company uses a standard cost system using direct labor-hours (DLHS) to apply monufacturing óv…

A: FMOH budget variance = Budgeted fixed manufacturing overhead cost - Actual fixed manufacturing…

Q: Predetermined Overhead Rates, Overhead Variances, Unit Costs Primera Company produces two products…

A: "Since you have posted a question with multiple sub parts, we will solve first three sub parts for…

Q: Meridian Fashions uses standard costs for their manufacturing division. The allocation base for…

A: Fixed overhead cost variance = Budgeted fixed overhead - Actual fixed overhead

Q: Predetermined overhead rate Factory overhead charged to Work in Process account Under / (Over)…

A: Direct Materials refers to the raw materials used to manufacture a product. Normally all the direct…

Q: Meger Manufacturing uses the direct labor cost method for applying factory overhead to production.…

A: Overhead rate = Budgeted factory overhead /Budgeted direct labor cost = $800,000 / $1,000,000 =…

Q: Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of…

A: Fixed overhead is the cost that is incurred regardless of the output level. It remains the same at…

Q: Are the answers correct?

A: 9.Variable overhead rate variance: The difference between the actual variable overhead rate and…

Q: A change in the quality of materials purchased A new supplier contract Error in the accounting…

A: 1) Material price variance = Material price variance occurs when the actual price paid is more or…

Q: (a) Compute Elite’s predetermined manufacturing overhead rate for 2020. (b) Calculate the total…

A: SOLUTION A- Particulars Amount…

Q: i) Calculate the predetermined plantwide overhead rate. (Note: Round to the nearest cent.) ii)…

A: Predetermined overhead rate is the rate which has been computed and estimated by the company to…

Q: How do I figure out the variable overhead rate variance?

A: Overhead variances: overhead variances is the difference between the actual overhead and the…

Q: Prepare a Manufacturing Overhead Budget. (When entering answers in the manufacturing overhead…

A: Manufacturing Overhead budget is given below,

Q: Preparing journal entries Marsh Company uses a standard cost system and reports the following…

Q: What is the under- or overapplied overhead for the firm? 436,800 x underapplied Feedback V Check My…

A: If the Actual Overhead is more than the applied Overhead then it is called as Underapplied Overhead…

Q: A company uses a standard costing system and applies overhead to production based on direct…

A: Predetermined overhead rate (Fixed overhead) = Budgeted Fixed overhead cost ÷ Budgeted hours =…

Q: AirPro Corporation reports the following for this period. Actual total overhead $ 28,575…

A: The variance is the difference between the actual data and standard output of the production. The…

Q: Tiffany charges manufacturing overhead to products by using a predetermined application rate,…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Manufacturing overhead data for the production of Product H by Kingbird Company, assuming the…

A: Given the following information: Overhead incurred for 46,100 actual direct labor hours worked:…

Q: Primara Corporation has a standard cost system In which It apples overhead to products based on the…

A: Introduction Pre-determined Overhead Rate: The predetermined overhead rate is calculated in order to…

Q: Determine the overhead variance for the period?

A: Variance overhead is difference between the actual rate and standard rate multiplied with actual…

Q: Compute for the following for Max Company: Material Price Variance Material Quantity Variance Labor…

A: Standard : Material = 2,100 units*2 pounds per unit Standard Material Quantity =4200 pounds…

Q: Rainbow Company uses standard cost system for its production process. Rainbow Company applies…

A: Working: Budgeted VOH/Actual = Direct Labor Hour x Standard Variable Overhead Rate…

Q: Predetermined Overhead Rates, Overhead Variances, Unit Costs Primera Company produces two products…

A: Departmental overhead rates are calculated in a similar way to the single-plant wide rate, except…

Q: Assume that a company uses a standard cost system and applies overhead to production based on direct…

A: At the beginning of the accounting period, a predetermined overhead rate (POHR) is calculated by…

Q: Required: (a) Compute, BuiltbyHands Stores predetermined manufacturing overhead rate for 20X8. (b)…

A: Job costing: It is a method of costing where in all the costs like direct material, direct labor and…

Q: Primara Corporation has a standard cost system in which it applies overhead to products based on the…

A: Predetermined overhead = Total fixed overhead/budgeted labor hours

Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Applying Overhead in a Standard Costing System

Privack Corporation has a standard cost system in which it applies overhead to products base the standard direct labor-hours allowed for the actual output of the period. Data concerning most recent year appear below:

Required:

1. Compute the predetermined overhead rate for the year. Be sure to include the total budget fixed overhead and the total budgeted variable overhead in the numerator of your rate.

2. Compute the amount of overhead that would be applied to the output of the period.

Budgeted variable overhead cost per direct labor-hour
Total budgeted fixed overhead cost per year...
Budgeted direct labor-hours (denominator level of activity)
Actual direct labor-hours.
Standard direct labor-hours aliowed for the actual output.
$2
.......
$250,000
....
39,000
38.000

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? Budgeted direct labor hours: 60,000 Budgeted direct labor expense: $1,500,000 Estimated machine hours: 100,000
A partial responsibility accounting report for a cost center is below. The value of letter (c) would be: Over (Under) Budget Controllable Costs Budgeted Actual Direct materials.... $52,800 $ a Direct labor....... 24,000 26,000 Utilities 19,200 C Totals... $96,000 $96,600 A $19,000 B $19,400 C) $54,000 D) $2,000 E None of the above $(1,200) b (200) $ 600
The master budget of Knope Inc. shows that the planned activity level for next year is expected to be 25,000 machine hours. At this level of activity, the following manufacturing overhead costs are expected: Indirect labor................................................. $720,000 Machine supplies.............................................180,000 Indirect materials.............................................210,000 Depreciation on factory building..................150,000 Total manufacturing overhead.................$1,260,000 A flexible budget for a level of activity of 30,000 machine hours would show total manufacturing overhead costs of Group of answer choices $1,260,000 $1,512,000 $1,362,000 $1,482,000
Cushing, Inc., costs products using a normal costing system. The following data are available for last year: Budgeted: Overhead………………………$357,000 Machine hours………………..140,000 Direct labor hours…………….17,000 Actual: Overhead……………………..$355,000 Machine hours……………….137,000 Direct labor hours……………16,500 Prime cost……………………$753,500 Number of units…………….250,000 Overhead is applied on the basis of direct labour hours. 1.What was last year’s per unit product cost? a. $1.39 b. $4.40 c. $4.43 d. $3.01 2.Non-unit-level drivers are prominent in activity-based coting systems. Which of the following is a non-unit-level driver? a. Machine hours b. Direct materials c. Assembly hours d. Setup hours
10. The following data relate to direct labor costs for the current period: Standard costs 7,500 hours at $11.70 6,000 hours at S12.00 Actual costs What is the direct labor time variance? a. $18,000 favorable b. $18,000 unfavorable c. $17,550 unfavorable d. $17,550 favorable
Arberg Company's controller prepared the following budgeted income statement for the coming year: Sales ........................$415,000 Total variable cost .........302,950 Contribution margin......$112,050 Total fixed cost ..............64,800 Operating income .........$47,250 Required: 1. What is Arberg's variable cost ratio? What is its Contribution marginratio? 2. Suppose Arberg's actual revenues are $30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Arberg earn to break even? Prepare a Contribution marginincome statement to verify the accuracy of your answer. 4. What is Arberg's expected margin of safety? 5. What is Arberg's margin of safety if sales revenue is $380,000?
Q1. Prepare a Flexible budget for overheads on the basis of the following data. Ascertain the overhead rates at 70% and 80% capacity. Variable Overheads (60% capacity) Indirect Material = Rs. 6,000 Labour Rs. 18,000 Semi-variable overheads: Electricity (40% fixed) = Rs. 40,000 Repairs (80% fixed) = Rs. 2,400 Fixed Overheads: Depreciation Rs. 16,500 = Insurance = Rs. 4,500 Salaries= Rs. 20,000 Estimated Labour Hours 15,000 hrs = E
Q1. Prepare a Flexible budget for overheads on the basis of the following data. Ascertain the overhead rates at 70% and 80% capacity. Variable Overheads (60% capacity) Indirect Material = Rs. 6,000 Labour Rs. 18,000 Semi-variable overheads: Electricity (40% fixed) = Rs. 40,000 Repairs (80% fixed) = Rs. 2,400 Fixed Overheads: Depreciation Rs. 16,500 = Insurance = Rs. 4,500 Salaries= Rs. 20,000 Estimated Labour Hours 15,000 hrs T A ہے
the budgeted direct labor cost per unit of Product T is closest to: 9.10 10.50 7.00 15.75
6) Some of the beginning and end of the period information of the production enterprise, which budgets the General Production Expenses on its products according to the Direct Labor Hours, are as follows.Budgeted General Production Expenses 20.000.-₺Actual Activity Volume 3,800 Direct labor hoursActual General Production Expenses 18.000.-₺Overload 1.000.-₺Desired: Calculate the "Budgeted Activity Volume" of the business. A. 4,500 Direct labor hoursB. 4,000 Direct labor hoursC. 2,500 direct labor hoursD. 3,000 Direct labor hoursE. 5,000 Direct labor hours
Arberg Company s controller prepared the following budgeted income statement for the coming year: Sales ........................$415,000 Total variable cost .........302,950 Contribution margin ......$112,050 Total fixed cost ..............64,800 Operating income .........$47,250 Required 4. What is Arberg s expected margin of safety? 5. What is Arberg s margin of safety if sales revenue is $380,000?
Arberg Company s controller prepared the following budgeted income statement for the coming year: Sales ........................$415,000 Total variable cost .........302,950 Contribution margin ......$112,050 Total fixed cost ..............64,800 Operating income .........$47,250 Required: 1. What is Arberg s variable cost ratio? What is its contribution margin ratio? 2. Suppose Arberg s actual revenues are $30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer. 4. What is Arberg s expected margin of safety? 5. What is Arberg s margin of safety if sales revenue is $380,000?