A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $357,800 and direct labor hours would be 47,300. Actual manufacturing overhead costs incurred were $306,900, and actual direct labor hours were 52,100. The entry to apply the factory overhead costs for the year would include a a.credit to Factory Overhead for $393,876 b.debit to Factory Overhead for $306,900 c.debit to Factory Overhead for $393,876 d.credit to Factory Overhead for $357,800 The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Labor HoursPer Unit Machine HoursPer Unit Rings 960 4 3 Dings 2,050 7 9 All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $89,500. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $72,300. The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours. What is the Fabrication Department overhead rate per machine hour? a.$4.20 b.$4.48 c.$4.89 d.$3.97
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.
A manufacturing company applies factory
The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below.
Product |
Number of Units |
Labor Hours Per Unit |
Machine Hours Per Unit |
| Rings | 960 | 4 | 3 |
| Dings | 2,050 | 7 | 9 |
All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $89,500. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $72,300.
The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours.
What is the Fabrication Department overhead rate per machine hour?
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