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Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials P 1.00 per DLH Indirect labor 1.25 per DLH Utilities 0.50 per DLH Insurance 50,000 Depreciation 400,000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs P 87,000 Fixed overhead costs 423,000 Direct labor hours 26,000 Question 1: The entry pertaining to the volume variance if the standard direct labor hours allowed for this month was 24,000 will include a debit/(credit) to manufacturing overehead amounting to? (USE NEGATIVE SIGN IF CREDIT) Question 2: How much is the variable spending variance if 17,500 units were produced? Question 3: If 13,000 units were produced during the month. How much overhead costs were debited to the Work-in-Process Inventory? (INSTRUCTIONS: DO NOT PUT COMMA or PESO SIGN ON YOUR ANSWERS)

Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials P 1.00 per DLH Indirect labor 1.25 per DLH Utilities 0.50 per DLH Insurance 50,000 Depreciation 400,000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs P 87,000 Fixed overhead costs 423,000 Direct labor hours 26,000 Question 1: The entry pertaining to the volume variance if the standard direct labor hours allowed for this month was 24,000 will include a debit/(credit) to manufacturing overehead amounting to? (USE NEGATIVE SIGN IF CREDIT) Question 2: How much is the variable spending variance if 17,500 units were produced? Question 3: If 13,000 units were produced during the month. How much overhead costs were debited to the Work-in-Process Inventory? (INSTRUCTIONS: DO NOT PUT COMMA or PESO SIGN ON YOUR ANSWERS)

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 6E: Foamy Inc. manufactures shaving cream and uses the weighted average cost method. In November,...
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Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials 1.00 per DLH Indirect labor 1.25 per DLH Utilities 0.50 per DLH Insurance 50,000 Depreciation 400,000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs P 87,000 Fixed overhead costs 423,000 Direct labor hours 26,000 Question 1: The entry pertaining to the volume variance if the standard direct labor hours allowed for this month was 24,000 will include a debit/(credit) to manufacturing overehead amounting to? (USE NEGATIVE SIGN IF CREDIT) Question 2: How much is the variable spending variance if 17,500 units were produced? Question 3: If 13,000 units were produced during the month. How much overhead costs were debited to the Work-in-Process Inventory? (INSTRUCTIONS: DO NOT PUT COMMA or PESO SIGN ON YOUR ANSWERS)
Transcribed Image Text:Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials 1.00 per DLH Indirect labor 1.25 per DLH Utilities 0.50 per DLH Insurance 50,000 Depreciation 400,000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs P 87,000 Fixed overhead costs 423,000 Direct labor hours 26,000 Question 1: The entry pertaining to the volume variance if the standard direct labor hours allowed for this month was 24,000 will include a debit/(credit) to manufacturing overehead amounting to? (USE NEGATIVE SIGN IF CREDIT) Question 2: How much is the variable spending variance if 17,500 units were produced? Question 3: If 13,000 units were produced during the month. How much overhead costs were debited to the Work-in-Process Inventory? (INSTRUCTIONS: DO NOT PUT COMMA or PESO SIGN ON YOUR ANSWERS)
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