Descamps Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead isapplied to products on the basis of direct labor-hours.InputsVariable manufacturing overheadStandard Quantity orHours per Unit of Output Standard Price or Rate0.20 hours$ 6.10 per hourThe company has reported the following actual results for the product for July:Actual output4,200 units780 hoursActual direct labor-hoursActual variable overhead rate$ 6.20 per hourThe variable overhead rate variance for the month is closest to:Multiple Choice$84 FO $84 UO $78 F

Name: Descamps Incorporated has provided the following data concerning one
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Description: Descamps Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead isapplied to products on the basis of direct labor-hours.InputsVariable manufacturing overheadStandard

Variable overhead rate variance = Actual overhead - (Actual hours * Standard rate)

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Descamps Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Standard Quantity or Hours per Unit of Output 0.20 hours Standard Price or Rate Inputs Variable manufacturing overhead 2$ $ 6.10 per hour The company has reported the following actual results for the product for July: Actual output 4,200 units 780 hours Actual direct labor-hours Actual variable overhead rate $ 6.20 per hour The variable overhead rate variance for the month is closest to:

Descamps Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Standard Quantity or Hours per Unit of Output 0.20 hours Standard Price or Rate Inputs Variable manufacturing overhead 2$ $ 6.10 per hour The company has reported the following actual results for the product for July: Actual output 4,200 units 780 hours Actual direct labor-hours Actual variable overhead rate $ 6.20 per hour The variable overhead rate variance for the month is closest to:

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 8EA: Queen Industries uses a standard costing system in the manufacturing of its single product. It...

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Cushing, Inc., costs products using a normal costing system. The following data are available for last year: Overhead is applied on the basis of direct labor hours. What was last years per unit product cost? a. 1.39 b. 4.40 c. 4.43 d. 3.01
Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of direct labor and direct materials per unit for the year are as follows: The standard price paid per pound of direct materials is 1.60. The standard rate for labor is 8.00. Overhead is applied on the basis of direct labor hours. A plantwide rate is used. Budgeted overhead for the year is as follows: The company expects to work 12,000 direct labor hours during the year; standard overhead rates are computed using this activity level. For every small stapler produced, the company produces two regular staplers. Actual operating data for the year are as follows: a. Units produced: small staplers, 35,000; regular staplers, 70,000. b. Direct materials purchased and used: 56,000 pounds at 1.5513,000 for the small stapler and 43,000 for the regular stapler. There were no beginning or ending direct materials inventories. c. Direct labor: 14,800 hours3,600 hours for the small stapler and 11,200 hours for the regular stapler. Total cost of direct labor: 114,700. d. Variable overhead: 607,500. e. Fixed overhead: 350,000. Required: 1. Prepare a standard cost sheet showing the unit cost for each product. 2. Compute the direct materials price and usage variances for each product. Prepare journal entries to record direct materials activity. 3. Compute the direct labor rate and efficiency variances for each product. Prepare journal entries to record direct labor activity. 4. Compute the variances for fixed and variable overhead. Prepare journal entries to record overhead activity. All variances are closed to Cost of Goods Sold. 5. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total direct materials and direct labor usage variances? Explain.
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Primera Company produces two products and uses a predetermined overhead rate to apply overhead. Primera currently applies overhead using a plantwide rate based on direct labor hours. Consideration is being given to the use of departmental overhead rates where overhead would be applied on the basis of direct labor hours in Department 1 and on the basis of machine hours in Department 2. At the beginning of the year, the following estimates are provided: Actual results reported by department and product during the year are as follows: Required: 1. Compute the plantwide predetermined overhead rate and calculate the overhead assigned to each product. 2. Calculate the predetermined departmental overhead rates and calculate the overhead assigned to each product. 3. Using departmental rates, compute the applied overhead for the year. What is the under- or overapplied overhead for the firm? 4. Prepare the journal entry that disposes of the overhead variance calculated in Requirement 3, assuming it is not material in amount. What additional information would you need if the variance is material to make the appropriate journal entry?
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