Shorts, Inc. produces small engines. For last year's operations, the following data were gathered: Units produced: 100,000 Direct labor: 160,000 hours @ $12.00 Actual variable overhead: $1,300,000 Shorts, Inc. employs a standard costing system. During the year, a variable overhead rate of $8.00 was used. The labor standard requires 1.5 hours per unit produced. The variable overhead spending and efficiency variances are, respectively   $20,000 U and $80,000 F. $100,000 U and $20,000 U. $20,000 U and $80,000 U. $100,000 U and $20,000 F. None of these.

Carpenter Company uses standard costing. The company has a manufacturing plant in Georgia. Standard labour-hours per unit are 0.50, and the variable overhead rate for the Georgia plant is $3.50 per direct labour-hour. Fixed overhead for the Georgia plant is budgeted at $1,800,000 for the year. Firm management has always used variance analysis as a performance measure for the plant. Tom Saban has just been hired as a new controller for Carpenter Company. Tom is good friends with the Georgia plant manager and wants him to get a favourable review. Tom decides to underestimate production, and budgets annual output of 1,200,000 units. His explanation for this is that the economy is slowing and sales are likely to decrease. At the end of the year, the plant reported the following actual results: output of 1,500,000 using 760,000 labour-hours in total, at a cost of $2,700,000 in variable overhead and $1,850,000 in fixed overhead. Briefly answer the following questions (and then respond to at…

Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. The budgeted variable manufacturing overhead is $5.00 per direct labor-hour and the budgeted fixed manufacturing overhead is $2,295,000 per year.   The standard quantity of materials is 4 pounds per unit and the standard cost is $10.50 per pound. The standard direct labor-hours per unit is 1.5 hours and the standard labor rate is $13.50 per hour.   The company planned to operate at a denominator activity level of 255,000 direct labor-hours and to produce 170,000 units of product during the most recent year. Actual activity and costs for the year were as follows:   Actual number of units produced 204,000 Actual direct labor-hours worked 331,500 Actual variable manufacturing overhead cost incurred $ 961,350 Actual fixed manufacturing overhead cost incurred $ 2,652,000   Required: 1. Compute the predetermined overhead rate…

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