A manufacturer of industrial equipment has a standard costing system based on standard direct labor-hours (DLHS) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: Level of activity Overhead costs at the denominator activity level: Variable overhead cost Fixed overhead cost 2,950 DLHS $ 9,400 $39,125 The following data pertain to operations for the most recent period: Actual hours Standard hours allowed for the actual output Actual total variable manufacturing overhead cost Actual total fixed manufacturing overhead cost 3,500 DLHS 2,637 DLHS $10,000 $39,525 What is the predetermined overhead rate to the nearest cent?
A manufacturer of industrial equipment has a standard costing system based on standard direct labor-hours (DLHS) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: Level of activity Overhead costs at the denominator activity level: Variable overhead cost Fixed overhead cost 2,950 DLHS $ 9,400 $39,125 The following data pertain to operations for the most recent period: Actual hours Standard hours allowed for the actual output Actual total variable manufacturing overhead cost Actual total fixed manufacturing overhead cost 3,500 DLHS 2,637 DLHS $10,000 $39,525 What is the predetermined overhead rate to the nearest cent?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...
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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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