Calculating the Predetermined Overhead Rate, Applying Overhead to Production At the beginning of the year, Debion Company estimated the following: Overhead $434,400 Direct labor hours 78,250 Debion uses normal costing and applies overhead on the basis of direct labor hours. For the month of March, direct labor hours were 17,215. Required: 1. Calculate the predetermined overhead rate for Debion. Round your answer to the nearest cent. $ per direct labor hour 2. Calculate the overhead applied to production in March. Round your intermediate calculations to two decimal places and round your answer to nearest whole value. $
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.
Calculating the Predetermined
At the beginning of the year, Debion Company estimated the following:
| Overhead | $434,400 |
| Direct labor hours | 78,250 |
Debion uses normal costing and applies overhead on the basis of direct labor hours. For the month of March, direct labor hours were 17,215.
Required:
1. Calculate the predetermined overhead rate for Debion. Round your answer to the nearest cent.
$ per direct labor hour
2. Calculate the overhead applied to production in March. Round your intermediate calculations to two decimal places and round your answer to nearest whole value.
$
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