Obj. 4 Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 20,000 hours of productive capacity in the department: Variable overhead costs: Indirect factory labor $180,000 Power and light 12,000 Indirect materials 64,000 Total variable overhead cost $256,000 Fixed overhead costs: Supervisory salaries $ 80,000 Depreciation of plant and equipment 50,000 32,000 162,000 $418,000 Insurance and property taxes Total fixed overhead cost Total factory overhead cost Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 18,000, 20,000, and 22,000 hours of production.
Obj. 4 Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 20,000 hours of productive capacity in the department: Variable overhead costs: Indirect factory labor $180,000 Power and light 12,000 Indirect materials 64,000 Total variable overhead cost $256,000 Fixed overhead costs: Supervisory salaries $ 80,000 Depreciation of plant and equipment 50,000 32,000 162,000 $418,000 Insurance and property taxes Total fixed overhead cost Total factory overhead cost Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 18,000, 20,000, and 22,000 hours of production.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 13E: Flexible overhead budget Leno Manufacturing Company prepared the following factory overhead cost...
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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.
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