FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Use the following information for the Exercises below. (Algo)
[The following information applies to the questions displayed below.]
Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base
is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the
following for this period.
Flexible Budget at
80% Сарасity
53,750
Actual
Results
50,000
Production (in units)
Overhead
Variable overhead
Fixed overhead
Total overhead
$ 295,625
53,750
$ 349,375
$ 354,500
Exercise 21-17 (Algo) Computing standard overhead rate and total overhead variance LO P4
1. Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 26,875 DLH, computed as
53,750 units × 0.5 DLH per unit.
2. Compute the standard overhead applied.
3. Compute the total overhead variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no
variance.)
1. Standard overhead rate
2. Standard overhead applied
3. Overhead variance
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Transcribed Image Text:Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Flexible Budget at 80% Сарасity 53,750 Actual Results 50,000 Production (in units) Overhead Variable overhead Fixed overhead Total overhead $ 295,625 53,750 $ 349,375 $ 354,500 Exercise 21-17 (Algo) Computing standard overhead rate and total overhead variance LO P4 1. Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 26,875 DLH, computed as 53,750 units × 0.5 DLH per unit. 2. Compute the standard overhead applied. 3. Compute the total overhead variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) 1. Standard overhead rate 2. Standard overhead applied 3. Overhead variance
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