The Litton Company has established standards as follows:Direct MaterialDirect Labour3 kgs. @ $4/kg. = $12 per unit2 hrs. @ $8/hr. = $16 per unit2 hrs. @ $5/hr. = $10 per unit%3!Variable Manufacturing OverheadActual production figures for the past year are given below.Units ProducedDirect Material UsedDirect Material Purcahsed (3,000 kgs.)6002,000 kgs.$11,400Direct Labour Cost (1,100 hrs.)Variable Manufacturing Overhead Cost Incurred$9,240$5,720The company applies variable manufacturing overhead to products on the basis of direct labourhours.What is the variable overhead efficiency variance?

Name: The Litton Company has established standards as follows:Direct Materi
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Description: The Litton Company has established standards as follows:Direct MaterialDirect Labour3 kgs. @ $4/kg. = $12 per unit2 hrs. @ $8/hr. = $16 per unit2 hrs. @ $5/hr. = $10 per unit%3!Variable Manufacturing OverheadActual production figures for the past ye

Variable Overhead Efficiency Variance is the difference between the standard budgeted time and…

Answered: The company applies variable…

Business

Accounting

The company applies variable manufacturing overhead to products on the basis of direct labour hours. What is the variable overhead efficiency variance?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please explain:: What is the purpose of an overhead rate What are the steps to apply the overhead cost to a product What does it represent when the overhead cost for over-applied
Please indicate which are product costs and which are period costs. Under Absorption Costing: Direct Materials are considered a Direct Labor is considered a Variable overhead is considered a Fixed overhead is considered a Under Variable Costing: Direct Materials are considered a Direct Labor is considered a Variable overhead is considered a Fixed overhead is considered a
When used as the denominator in the calculation of an overhead rate, which of the following will cause the least amount of overhead to be applied? a. Theoretical activity level b. Expected activity level c. Practical activity level d. Normal activity level
Under variable costing, all fixed manufacturing costs are treated as a a. product cost included in the cost of goods manufactured. b. product cost included in the cost of ending inventory. c. period expense deducted from manufacturing margin. d. period expense deducted from contribution margin.
What is a key difference between variable costing and absorption costing? a. The usage of homogenous cost pools. b. The classification of fixed factory overhead. c. classification of direct materials and labor. d. The choice of allocation base.
Explain why a manufacturer’s cost of supervising production might be a step-fixed cost.
1. What are the three primary reasons of using a standard cost system? In a business that routinely manufactures the same products or performs the same services, why are standards helpful? 2. What are ideal standards? What are currently attainable standards? Explain which standard is usually adopted and why. 3. Some people suggest that the direct labor rate variance is never controllable. Do you agree or disagree? Give reasons to support your answer.
In Traditional product costing systems, the measure of product activity is usually some volume based cost driver, like direct labor hours. True or False?
Which of the following is a correct equation to calculate the fixed overhead production-volume variance? a. budgeted fixed overhead costs − fixed overhead costs allocated for actual output b. static budget amount − flexible budget amount c. actual costs incurred − fixed overhead costs allocated for actual output d. flexible budget amount − actual costs incurred
why is adjustment necessary for under and over absorption of overheads in the absorption costing model.
Which of the following statements Is true? Multiple Choice The material quantity variance is recorded when overhead is applied to production. The material price and the material quantity variances are recorded at the same time., The materials quantity variance is recorded when materials are used in production. The materials quantity variance is recorded when materials are purchased.
What is the key difference between Absorption and Variable Costing? A Full Costing treats Manufacturing Overhead as a period cost B Variable Costing treats Fixed Manufacturing Overhead as a period cost C Absorption Costing only considers variable costs to calculate net income D Variable Costing only considers variable costs to calculate net income