Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost Is applled on the basis of standard direct labor-hours. The budgeted varlable manufacturing overhead Is $5.20 per direct labor-hour and the budgeted fixed manufacturing overhead is $2,484,000 per year. The standard quantity of materlals is 4 pounds per unit and the standard cost Is $11.00 per pound. The standard direct labor-hours per unit is 1.5 hours and the standard labor rate Is $13.60 per hour. The company planned to operate at a denominator activity level of 270,000 direct labor-hours and to produce 180,000 units of product during the most recent year. Actual activity and costs for the year were as follows: Actual number of units produced 216, 000 Actual direct labor-hours worked Actual variable manufacturing overhead cost incurred Actual fixed manufacturing overhead cost incurred 351,000 $1,053,000 $2,808,000 Requlred: 1. Compute the predetermined overhead rate for the year. Break the rate down Into varlable and fixed elements. 2 Prepare a standard cost card for the company's product. 3a. Compute the standard direct labor-hours allowed for the year's production. 3b. Complete the following Manufacturing Overhead T-account for the year. 4. Determine the reason for any underapplied or overapplied overhead for the year by computing the varlable overhead rate and efficlency variances and the fixed overhead budget and volume vartances. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 4 Compute the predetermined okead rate for the year. Break the rate down into variable and fixed elements. (Round your answers to 2 decimal places.) Predetermined overhead rate per DLH Variable rate per DLH Fixed rate per DLH K Reg 1 Req 2 >

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost Is applled on the basis of
standard direct labor-hours. The budgeted varlable manufacturing overhead is $5.20 per direct labor-hour and the budgeted fixed
manufacturing overhead Is $2,484,000 per year.
The standard quantity of materials is 4 pounds per unit and the standard cost Is $11.00 per pound. The standard direct labor-hours per
unit Is 1.5 hours and the standard labor rate Is $13.60 per hour.
The company planned to operate at a denominator activity level of 270,000 direct labor-hours and to produce 180,000 units of
product during the most recent year. Actual activity and costs for the year were as follows:
Actual number of units produced
Actual direct labor-hours worted
Actual variable manu£=cturing overhead cost incurred
Actual Eixed manufacturing ovezhead cost incurred
216,000
351,000
$1,053,000
$2,808,000
Required:
1. Compute the predetermined overhead rate for the year. Break the rate down Into varlable and fixed elements.
2 Prepare a standard cost card for the company's product.
3a. Compute the standard direct labor-hours allowed for the year's production.
3b. Complete the followIng Manufacturing Overhead T-account for the year.
4. Determine the reason for any underapplied or overapplied overhead for the year by computing the varlable overhead rate and
efficlency varlances and the fixed overhead budget and volume varlances.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Req 3A
Req 3B
Req 4
Compute the predetermined owead rate for the year. Break the rate down into variable and fixed elements. (Round
your answers to 2 decimal places.)
Predetermined overhead
rate
per DLH
Variable rate
per DLH
Fixed rate
per DLH
Req 2
Mc
Griw
Hill
Transcribed Image Text:Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost Is applled on the basis of standard direct labor-hours. The budgeted varlable manufacturing overhead is $5.20 per direct labor-hour and the budgeted fixed manufacturing overhead Is $2,484,000 per year. The standard quantity of materials is 4 pounds per unit and the standard cost Is $11.00 per pound. The standard direct labor-hours per unit Is 1.5 hours and the standard labor rate Is $13.60 per hour. The company planned to operate at a denominator activity level of 270,000 direct labor-hours and to produce 180,000 units of product during the most recent year. Actual activity and costs for the year were as follows: Actual number of units produced Actual direct labor-hours worted Actual variable manu£=cturing overhead cost incurred Actual Eixed manufacturing ovezhead cost incurred 216,000 351,000 $1,053,000 $2,808,000 Required: 1. Compute the predetermined overhead rate for the year. Break the rate down Into varlable and fixed elements. 2 Prepare a standard cost card for the company's product. 3a. Compute the standard direct labor-hours allowed for the year's production. 3b. Complete the followIng Manufacturing Overhead T-account for the year. 4. Determine the reason for any underapplied or overapplied overhead for the year by computing the varlable overhead rate and efficlency varlances and the fixed overhead budget and volume varlances. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 4 Compute the predetermined owead rate for the year. Break the rate down into variable and fixed elements. (Round your answers to 2 decimal places.) Predetermined overhead rate per DLH Variable rate per DLH Fixed rate per DLH Req 2 Mc Griw Hill
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