PA 10. LO 8.4 Prepare a flexible budget for overhead based on the following data: Percent of capacity Direct labor hours Units of output Variable overhead Fixed overhead Total overhead 90% 3,600 900 $3,600 $6,000 $9,600 100% 4,000 1,000 $ 4,000 $ 6,000 $10,000 Normal capacity = 100% and overhead is applied based on direct labor hours Standard overhead rate = $10,000/4,000 = $2.50 per direct labor hour Direct materials are $67.50 per unit. Direct labor is $23.50 per hour. 110% 4,400 1,100 $ 4,400 $ 6,000 $10,400

PA 10. LO 8.4 Prepare a flexible budget for overhead based on the following data: Percent of capacity Direct labor hours Units of output Variable overhead Fixed overhead Total overhead 90% 3,600 900 $3,600 $6,000 $9,600 100% 4,000 1,000 $ 4,000 $ 6,000 $10,000 Normal capacity = 100% and overhead is applied based on direct labor hours Standard overhead rate = $10,000/4,000 = $2.50 per direct labor hour Direct materials are $67.50 per unit. Direct labor is $23.50 per hour. 110% 4,400 1,100 $ 4,400 $ 6,000 $10,400

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 12PA: ABC Inc. spent a total of $48,000 on factory overhead. Of this, $28,000 was fixed overhead. ABC Inc....

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2. Variable manufacturing overhead variance analysis The Sourdough Bread Company bakes baquettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. Following is some budget data for the Sourdough Bread Company: 0.02 hours per baguette Direct manufacturing labor use Variable manufacturing overhead $10.00 per direct manufacturing labor-hour The Sourdough Bread Company provides the following additional data for the year ended December 31, 2021: 1.
Question A21 Alders Ltd use an absorption costing and have calculated an overhead absorption rate based on units of output. The following information is relevant to the last quarter: Budgeted overhead was £231,000 Actual overhead was £235,000 Actual output was 11,000 units Budgeted output was 10,500 units What was the level of under or over absorption in the last quarter? A £7,000 over absorbed B £4,000 under absorbed C £4,000 over absorbed D £7,000 under absorbed
Task 2 Stone Absorption costing (over- and under absorbtion) Marginal costing Stine is drafting a budget on the absis of the following data: Direct material Direct labour Variable production expenses Fixed production overheads are budgeted at Normal output The selling price is fixed at Information about production and sales Production. Sales January units 7 500 000 5 10 $ per unit 5 $ per unit 8 $ per unit. i) absorption costing ii) marginal costing c) Compare Net profit and make a conclusion 27 000 9.000 30 $ per unit. February units 8500 8 500 $ per month and units per month; March units 9.000 9 500 (a)Prepare a cost card using absorption and marginal costing (b)Set out Income Statements for the months of January and February, using 90 % capacity.
Required information [The following information applies to the questions displayed below.] Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Production (in units). Overhead. Variable overhead Fixed overhead Total overhead Flexible Budget at 80% Capacity 52,750 $ 290, 125 52,750 $ 342,875 Standard overhead rate 2. Standard overhead applied 3. Overhead variance Actual Results 48,400 $341,300 1. Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 26,375 DLH, computed as 52,750 units x 0.5 DLH per unit. 2. Compute the standard overhead applied. 3. Compute the total overhead variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)
Relevant information for product A follows: Actual variable overhead cost per hour Standards variable overhead cost per hour Actual hours Standard hours $8,00 $7.50 O $2,250 unfavorable. O $4,000 unfavorable. O $2,250 favorable. O $4,000 favorable. 4,500 5,000 What was the variable overhead spending variance for product A?
Problem-12.15 The standard and actual cost data of RIZWAN LTD. are as follows:: Standard 70,000 units @ Rs. 28 35,000 hrs @ Rs. 42 Actual 68,600units @ Rs. 24.50 42,000 hrs @ Rs. 45.50 Rs. 94,500 Direct Material Direct Labour Factory Overhead 50% of direct labour Required: a) Calculate Material price variance and material quantity variance Labour rate Variance and labour time variance ii) iii) Overhead variance b) General journal entries to record the above information and to close the variance accounts.
Exercise 10A-3 (Algo) Applying Overhead in a Standard Costing System [LO10-4] Privack Corporation applies overhead to products based on the standard direct labor-hours allowed for the actual output. Data concerning the most recent year appear below: 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 allowed for the actual output Required: $ 4.00 $ 592,856 59,286 83,000 82,000 1. Compute the predetermined overhead rate for the year. Be sure to include the total budgeted fixed overhead and the total budgeted variable overhead in the numerator of your rate. Note: Round your answer to the nearest whole dollar amount. 2. Compute the amount of overhead applied to the output of the period. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. 1. Predetermined overhead rate 2. Overhead applied…
Exercise 10A-3 (Algo) Applying Overhead in a Standard Costing System [LO10-4] Privack Corporation applies overhead to products based on the standard direct labor-hours allowed for the actual output. Data concerning the most recent year appear below: 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 allowed for the actual output Required: 1. Predetermined overhead rate 2. Overhead applied $ 4.00 $ 528, 180 1. Compute the predetermined overhead rate for the year. Be sure to include the total budgeted fixed overhead and the total budgeted variable overhead in the numerator of your rate. Note: Round your answer to the nearest whole dollar amount. 2. Compute the amount of overhead applied to the output of the period. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. per DLH 75,455…
Exercise 10A-3 (Algo) Applylng Overhead In a Standard CostIng System [LO10-4] Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: 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 allowed for the actual output 4.50 $ 563,213 59, 288 82, 000 81,600 Requlred: 1. Compute the predetermined overhead rate for the year. Be sure to include the total budgeted fxed overhead and the total budgeted variable overhead in the numerator of yourrate. (Round your answer to the neorest whole dellar emnount.). 2. Compute the amount of overhead that would be applied to the outout of the period. (Round your Intermedlate calculetions and final answer to the nearest whole doller…
Using the information provided will this produce a favorable or unfavorable Variable Overhead Efficiency Variance? Percent of capacity Direct labor hours Units of output Variable overhead Fixed overhead Total overhead The standard for hours is 2,000. 100% 2,500 1,000 $7,000 $ 6,000 $13,000
ABC Inc. spent a total of $48,000 on factory overhead. Of this, $28,000 was fixed overhead. ABC Inc. had budgeted $27,000 for fixed overhead. Actual machine hours were 5.000. Standard hours for units made were 4,800. The standard variable overhead rate was $4.10. What is the variable overhead rate variance?
Refer to Exercise 8.27. At the end of the year, Meliore, Inc., actually produced 310,000 units of the standard model and 115,000 of the deluxe model. The actual overhead costs incurred were: Required: Prepare a performance report for the period. In an attempt to improve budgeting, the controller for Meliore, Inc., has developed a flexible budget for overhead costs. Meliore, Inc., makes two types of products, the standard model and the deluxe model. Meliore expects to produce 300,000 units of the standard model and 120,000 units of the deluxe model during the coming year. The standard model requires 0.05 direct labor hour per unit, and the deluxe model requires 0.08. The controller has developed the following cost formulas for each of the four overhead items: Required: 1. Prepare an overhead budget for the expected activity level for the coming year. 2. Prepare an overhead budget that reflects production that is 10 percent higher than expected (for both products) and a budget for production that is 20 percent lower than expected.