company maintains warehouses that stock items carried by its dot.com clients. W client receives an order from a customer, the order is forwarded to Logistics Solu which pulls the item from storage, packs it, and ships it to the customer. The com uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 135,000 items were shipped to customers using 5,000 labor-hours. The company incurred a total of $14,750 in variable overhead costs. According to the company's standards, 0.04 direct labor-hours are required to fu order for one item and the variable overhead rate is $3.00 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 135,000 items to custom 2. What is the standard variable overhead cost allowed (SH x SR) to ship 135,000 to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficier variance? (For requirements 3 and 4, indicate the effect of each variance by selecting "F favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). In amounts as positive values. Do not round intermediate calculations.) 1. Standard quantity of labor-hours allowed
company maintains warehouses that stock items carried by its dot.com clients. W client receives an order from a customer, the order is forwarded to Logistics Solu which pulls the item from storage, packs it, and ships it to the customer. The com uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 135,000 items were shipped to customers using 5,000 labor-hours. The company incurred a total of $14,750 in variable overhead costs. According to the company's standards, 0.04 direct labor-hours are required to fu order for one item and the variable overhead rate is $3.00 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 135,000 items to custom 2. What is the standard variable overhead cost allowed (SH x SR) to ship 135,000 to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficier variance? (For requirements 3 and 4, indicate the effect of each variance by selecting "F favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). In amounts as positive values. Do not round intermediate calculations.) 1. Standard quantity of labor-hours allowed
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
Section: Chapter Questions
Problem 4E: The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the...
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