Insight Company uses a standard cost system and has the following information for the most recent month, April:Actual direct labor hours (DLHs) workedStandard DLHs allowed for good output produced this periodActual total factory overhead costs incurredBudgeted fixed factory overhead costsDenominator activity level, in direct labor hours (DLHS)Total factory overhead application rate per standard DLHThe fixed overhead production volume variance in April for Insight Company was:O $6,170 unfavorable.O $7,390 favorable.O $6,270 favorable.O $7,210 favorable.O $8,430 favorable.26,00027,000$ 61,300$ 10,70016,000$ 2.70

The fixed overhead production volume variance is a measure of the difference between the fixed…

Answered: Insight Company uses a standard cost…

Principles of Accounting Volume 2

19th Edition

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Author:OpenStax

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Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 9EB: Eagle Inc. uses a standard cost system. During the most recent period, the company manufactured...

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Cushing, Inc., costs products using a normal costing system. The following data are available for last year: Overhead is applied on the basis of direct labor hours. What was last years per unit product cost? a. 1.39 b. 4.40 c. 4.43 d. 3.01
Misterio Company uses a standard costing system. During the past quarter, the following variances were computed: Misterio applies variable overhead using a standard rate of 2 per direct labor hour allowed. Two direct labor hours are allowed per unit produced. (Only one type of product is manufactured.) During the quarter, Misterio used 30 percent more direct labor hours than should have been used. Required: 1. What were the actual direct labor hours worked? The total hours allowed? 2. What is the standard hourly rate for direct labor? The actual hourly rate? 3. How many actual units were produced?
Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: During the year, the company had the following activity: Actual fixed overhead was 12,000 less than budgeted fixed overhead. Budgeted variable overhead was 5,000 less than the actual variable overhead. The company used an expected actual activity level of 12,000 direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. Required: 1. Compute the unit cost using (a) absorption costing and (b) variable costing. 2. Prepare an absorption-costing income statement. 3. Prepare a variable-costing income statement. 4. Reconcile the difference between the two income statements.
Eagle Inc. uses a standard cost system. During the most recent period, the company manufactured 115,000 units. The standard cost sheet indicates that the standard direct labor cost per unit is $1.50. The performance report for the period includes an unfavorable direct labor rate variance of $3,700 and a favorable direct labor time variance of $10,275. What was the total actual cost of direct labor incurred during the period?
Ellis Companys labor information for September is as follows: A. Compute the standard direct labor rate per hour. B. Compute the direct labor time variance. C. Compute the standard direct labor rate if the direct labor rate variance was $2,712.30 (unfavorable).
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Overhead application rate Creole Manufacturing Inc. uses a job order cost system and standard costs. It manufactures one product, whose standard cost follows: The standards are based on normal capacity of 2,400 direct labor hours. Actual activity for October follows: Required: 1. Compute the variable and fixed factory overhead rates per unit. 2. Compute the variable and fixed overhead rates per direct labor hour. 3. Determine the total fixed factory overhead based on normal capacity.
Overhead application rate Roll Tide Manufacturing Inc. uses a job order cost system and standard costs. It manufactures one product, whose standard cost follows: The standards are based on normal capacity of 2,700 direct labor hours. Actual activity for March follows: Required: 1. Compute the variable and fixed factory overhead rates per unit. 2. Compute the variable and fixed overhead rates per direct labor hour. 3. Determine the total fixed factory overhead based on normal capacity.
Penny Company manufactures only one product and uses a standard cost system. The following information is from Pennys records for May: During May, the company used 12.5% more hours than the standard allowed. A. What were the total standard hours allowed for the units manufactured during the month? 8. What were the actual hours worked? C. How many actual units were produced during May?
Standard direct materials cost per unit from variance data The following data relating to direct materials cost for October of the current year are taken from the records of Good Clean Fun Inc., a manufacturer of organic toys: Determine the standard direct materials cost per unit of finished product, assuming that there was no inventory of work in process at either the beginning or the end of the month.
Potter Company has installed a JIT purchasing and manufacturing system and is using back-flush accounting for its cost flows. It currently uses a two-trigger approach with the purchase of materials as the first trigger point and the completion of goods as the second trigger point. During the month of June, Potter had the following transactions: 40,500 labor plus 222,750 overhead. There were no beginning or ending inventories. All goods produced were sold with a 60 percent markup. Any variance is closed to Cost of Goods Sold. (Variances are recognized monthly.) Required: Prepare the journal entries for the month of June using backflush costing, assuming that Potter uses the sale of goods as the second trigger point instead of the completion of goods.
Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Refer to the information for Pizza Vesuvio on the previous page. Assume that this information was used to construct the following formula for monthly labor cost. TotalLaborCost=5,237+(7.40EmployeeHours) Required: Assume that 675 employee hours are budgeted for the month of September. Use the total labor cost formula for the following calculations: 1. Calculate total variable labor cost for September. 2. Calculate total labor cost for September.

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