MANAGERIAL ACCOUNTING FOR MANGER CONNEC
6th Edition
ISBN: 9781266809132
Author: Noreen
Publisher: MCG
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Chapter 10A, Problem 10A.8P
Applying
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 $2 per direct labor-hour and the budgeted fixed manufacturing overhead is $480,000 per year.
The standard quantity of materials is 3 pounds per unit and the
Required:
- Compute the predetermined overhead rate for the year Break the rate down into variable and fixed elements.
- Prepare a standard cost card for the company’s product; show the details for all
manufacturing costs on your standard cost card. - Do the following:
- Compute the standard direct labor-hours allowed for the year’s production.
- Complete the following Manufacturing Overhead T-account for the year:
- Determine the reason for any underapplied or overapplied overhead for the year by computing the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances.
- Suppose the company had chosen 65,000 direct labor-hours as the denominator activity rather than 60,000 hours. State which, if any, of the variances computed in (4) above would have changed, and explain how the variance(s) would have changed. No computations are necessary.
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Students have asked these similar questions
Problem 2.
Each of the following independent situations relates to direct labor. Fill in the blanks.
A
в
C
Units produced
4,000
1,900
3,000
Actual hours worked
Standard hours for
8,400
2,000
6,000
production achieved
Standard hours per unit
Standard rate per hour
Actual labor cost
0.5
P10
3
P12
P12
P83,600
P24,500
Rate variance
P310U
P900U
P300F
Efficiency variance
P2,000U
P1,800F
P800 U
Problem-12.15
The standard and actual cost data of RIZWAN LTD. are as follows::
Standard
70,000 units @ Rs. 28
35,000 hrs @ Rs. 42
Actual
68,600units @ Rs. 24.50
42,000 hrs @ Rs. 45.50
Rs. 94,500
Direct Material
Direct Labour
Factory Overhead
50% of direct labour
Required:
a) Calculate
Material price variance and material quantity variance
Labour rate Variance and labour time variance
ii)
iii) Overhead variance
b) General journal entries to record the above information and to close the variance accounts.
I need part 4 and 5 solution
The Henry company made the following data available from its accounting records and reports.
600,000 estimated factory overhead = Rs.3.00
200,000 estimated direct labor hours
Further analysis indicates that one-third of the rate is variable cost oriented.
During the year, the company worked 210,000 direct labor hours and actual factory overhead expenditures were Rs.631,000.
Requirement:
Fixed FOH
Under or overapplied FOH
Spending Variance
Volume variance
Solve the problem if variable cost is 2/3 of applied rate.
Chapter 10A Solutions
MANAGERIAL ACCOUNTING FOR MANGER CONNEC
Ch. 10A - Fixed Overhead Variances LO10—4 Primara...Ch. 10A - Prob. 10A.2ECh. 10A - Prob. 10A.3ECh. 10A - Prob. 10A.4ECh. 10A - Prob. 10A.5ECh. 10A - Prob. 10A.6ECh. 10A - Prob. 10A.7ECh. 10A - Applying Overhead; Overhead Variances LO10—3,...Ch. 10A - Prob. 10A.9PCh. 10A - Comprehensive Standard Cost Variances LO10—1,...
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