obert Hermann, has developed the following information. Car Truck Estimated wheels produced 40,000 10,000 Direct labor hours per wheel 1 3 Total estimated overhead costs for the two product lines are $770,000.
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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- Current Attempt in Progress In Robert's manufacturing plant, the estimated monthly overhead cost function is provided in the Y = m(X) + b format: Total monthly overhead costs = $1.15(number of machine hours) + $6,500. Given this cost function, specify (a) the variable cost, (b) the fixed cost, (c) the cost driver, and (d) whether these monthly overhead costs are considered variable, fixed, or mixed in total. (Round variable cost to 2 decimal places, e.g. 15.25.) Variable cost Fixed cost Cost driver Cost type $ $Required information Skip to question [The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) $ 20.00 Direct labor (1.8 hours @ $12.00 per hour) 21.60 Overhead (1.8 hours @ $18.50 per hour) 33.30 Standard cost per unit $ 74.90 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs Depreciation—Building 23,000 Depreciation—Machinery 71,000 Taxes and insurance 18,000 Supervisory salaries 252,500 Total fixed overhead costs 364,500…(1) calculate the overhead assigned rate (note their order from above): Overhead Cost Items Estimated Overhead Cost Driver Activity Levels Activity Rate Purchasing $70,000 ? ? ? Handling materials $33,350 ? ? ? Machine setups $70,500 ? ? ? Inspections $25,500 ? ? ? Utilities $45,000 ? ? ? (2) calculate the total order cost (again, note their order from above): Activity Cost Drivers Activity Levels Activity Rate Assigned Costs ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Total Order Cost ?
- Based on analyzing the relationship of total factory overhead (Y) to direct labor hours (X). The following relationship was found: Y = $1,000 + $2X The equation was probably found through the use of which of the following mathematical techniques?Required information [The following information applies to the questions displayed below.] ACME manufacturing is a low-cost producer of a single, commodity product: RGL-01. Standard overhead cost information for one unit of this product is presented below: Required: 1. Calculate the fixed overhead application rate per machine hour using (a) budgeted output, (b) normal capacity, and (c) practical capacity. (Round your answers to 2 decimal places.) 2. What is the total overhead application rate per machine hour for each of the three choices identified in requirement 1 ? (Round your answers to 2 decimal places.) 3. What is the total overhead varlance for the year when the overhead application rate per machine hour is determined under each of the following options: (a) budgeted output, (b) normal capacity, and (c) practical capacity? Indicate whether each variance is favorable (F) or unfavorable (U), (Do not round intermediate calculations. Round your answers to the nearest whole dollar…Required information [The following information applies to the questions displayed below.] Trini Company set the following standard costs per unit for its single product Direct materials (30 pounds @ $4.40 per pound) Direct labor (6 hours @ $14 per hour) Variable overhead (6 hours @ $9 per hour) Fixed overhead (6 hours @ $12 per hour) Standard cost per unit Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of the company's capacity of 55,000 units per quarter. The following additional information is available. Operating Levels Production (in units) Standard direct labor hours (6 DLH/unit) Budgeted overhead (flexible budget) Fixed overhead Variable overhead $ 132.00 84.00 54.00 72.00 $342.00 Direct materials (1,485,000 pounds @ $4.40 per pound) Direct labor (297,000 hours @ $14 per hour) Overhead (297,000 hours @ $21 per hour) Standard (budgeted) cost Actual costs incurred during the current quarter follow. Direct…
- Based on analyzing the relationship of total factory overhead (Y) to direct labor hours (X), the following relationship was found: Y = $2,000 + Ş$5X. The $5 in the equation represents: Select one: O a. Total variable factory overhead costs. O b. Variable factory overhead costs per direct labor hour. O c. None of the answers given O d. Fixed factory overhead costs per direct labor hour. O e. Total fixed factory overhead costsIf estimated production overhead in the printing department is $120,000 and actual overhead is $116,000 and estimated machine hours in the printing department are 30,000 hours and actual machine hours are 32,000 hours, using normal costing what is the pre-determined overhead rate for the printing department? Select one: a. $3.63 per machine hour b. $4.00 per machine hour c. S3.87 per machine hour d. None of these e. $3.75 per machine hour/ext/map/index.html?_con=con&external_browser=0&launchU Direct materials (30 pounds @ $5.10 per pound) Direct labor (4 hours @ $15 per hour) Variable overhead (4 hours @ $6 per hour) Fixed overhead (4 hours $11 per hour) Standard cost per unit $ 153.00 60.00 24.00 44.00 $ 281.00 Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of the company's capacity of 68,000 units per quarter. The following additional information is available. Production (in units) Budgeted overhead (flexible budget) Standard direct labor hours (4 DLH per unit) Fixed overhead Variable overhead Operating Levels 70% 80% 98% 47,600 190,400 54,400 217,600 61,200 244,800 $ 2,393,600 $ 2,393,600 $2,393,600 $ 1,142,400 $ 1,305,600 $ 1,468,800 During the current quarter, the company operated at 90% of capacity and produced 61,200 units; actual direct labor totaled 239,800 hours. Units produced were assigned the following standard costs. Direct materials…
- ! Required information Use the following information for the Problems below. (Algo) [The following information applies to the questions displayed below.] Trini Company set the following standard costs per unit for its single product $ 153.00 Direct materials (30 pounds @ $5.10 per pound) Direct labor (4 hours @ $15 per hour) Variable overhead (4 hours @ $6 per hour) Fixed overhead (4 hours @ $11 per hour) 60.00 24.00 44.00 Standard cost per unit $ 281.00 Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of the company's capacity of 68,000 units per quarter. The following additional information is available. Operating Levels 80% 54,400 217,600 70% 90% Production (in units) Standard direct labor hours (4 DLH/unit) Budgeted overhead (flexible budget) 47,600 190,400 61, 200 244,800 $ 2,393,600 $ 1,142,400 $ 2,393, 600 $ 1,305, 600 $ 2,393,600 $ 1,468,800 Fixed overhead Variable overhead During the current quarter, the…Required Information [The following information applies to the questions displayed below.] Upstate Mechanical, Incorporated, has been producing two bearings, components T79 and B81, for use in production. Data regarding these two components follow. Machine hours required per unit Standard cost per unit: Direct material Direct labor Manufacturing overhead Variable* Fixedt Total T79 2.5 $ 2.25 4.00 2.00 3.75 $ 12.00 Maximum price 881 3.0 $ 3.75 4.50 2.25 4.50 $ 15.00 *Variable manufacturing overhead is applied on the basis of direct-labor hours. *Fixed manufacturing overhead is applied on the basis of machine hours. Upstate Mechanical's annual requirement for these components is 8,000 units of T79 and 11,000 units of B81. Recently. management decided to devote additional machine time to other product lines, leaving only 41,000 machine hours per year for producing the bearings. An outside company has offered to sell Upstate Mechanical its annual supply of bearings at prices of $11.25 for…In the Forming Department, the variable overheads is £200,900 and the fixed overheads is £401,800. The Machine time required and available at Forming Department is 98,000 hours. Assume that each Product A requires 4 machine hours at Forming Department, what is the total overheads cost per unit for Product A? Question 5 Answer a. £8.53/unit b. £24.6/unit c. £6.15/unit d. £16.4/unit