Logistics Solutions provides order fulfillment services for dot.com merchants. The company malntalns warehouses that stock Items carried by Its dot.com clients. When a client recelves an order from a customer, the order Is forwarded to Logistics Solutions, which pulls the Item from storage, packs It, and ships It to the customer. The company uses a predetermined varlable overhead rate based on direct labor-hours. In the most recent month, 185,000 Items were shipped to customers using 8,000 direct labor-hours. The company Incurreda total of $27,600 in varlable overhead costs. According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one Item and the varlable overhead rate is $3.50 per direct labor-hour. Requlred: 1. What is the standard labor-hours allowed (SH) to ship 185,000 Items to customers? 2 What Is the standard varlable overhead cost allowed (SH x SR) to ship 185,000 Items to customers? 3. What Is the varlable overhead spending varlance? 4. What Is the varlable overhead rate varlance and the varlable overhead efficiency varlance? (For requirements 3 and 4, Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero varlance). Input all amounts as positive values. Do not round Inte
Logistics Solutions provides order fulfillment services for dot.com merchants. The company malntalns warehouses that stock Items carried by Its dot.com clients. When a client recelves an order from a customer, the order Is forwarded to Logistics Solutions, which pulls the Item from storage, packs It, and ships It to the customer. The company uses a predetermined varlable overhead rate based on direct labor-hours. In the most recent month, 185,000 Items were shipped to customers using 8,000 direct labor-hours. The company Incurreda total of $27,600 in varlable overhead costs. According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one Item and the varlable overhead rate is $3.50 per direct labor-hour. Requlred: 1. What is the standard labor-hours allowed (SH) to ship 185,000 Items to customers? 2 What Is the standard varlable overhead cost allowed (SH x SR) to ship 185,000 Items to customers? 3. What Is the varlable overhead spending varlance? 4. What Is the varlable overhead rate varlance and the varlable overhead efficiency varlance? (For requirements 3 and 4, Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero varlance). Input all amounts as positive values. Do not round Inte
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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