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Operating Levels (X of capacity) 55% 33,550 671,000 Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted averhead Variable overhead Fixed overhead Total overhead 60% 36,600 732,000 65% 39,650 793,000 $ 1,744,600 878,400 $ 2,623,000 $ 1,903, 200 $ 2,061,800 878, 400 $2,940,200 878, 400 $ 2,781,600 During the current month, the company operated at 55% of capacity, direct labor of 652,000 hours were used following actual overhead costs were incurred. Actual variable overhead Actual fixed overhead $1,714,000 918,000

Operating Levels (X of capacity) 55% 33,550 671,000 Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted averhead Variable overhead Fixed overhead Total overhead 60% 36,600 732,000 65% 39,650 793,000 $ 1,744,600 878,400 $ 2,623,000 $ 1,903, 200 $ 2,061,800 878, 400 $2,940,200 878, 400 $ 2,781,600 During the current month, the company operated at 55% of capacity, direct labor of 652,000 hours were used following actual overhead costs were incurred. Actual variable overhead Actual fixed overhead $1,714,000 918,000

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...
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1. Compute the total variable overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) 2. Compute the total fixed overhead varlance and identify It as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) -At 55% of Operating Capacity- Predetermined OH Rate Standard DL Hours Overhead Costs Favorable/Unfavorable Applied Actual Results Variance Variable overhead applied 260 Favorable Fixed overhead applied 1.20 Unfavorable Unfavorable Total overhead variance 24 3.80
Transcribed Image Text:1. Compute the total variable overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) 2. Compute the total fixed overhead varlance and identify It as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) -At 55% of Operating Capacity- Predetermined OH Rate Standard DL Hours Overhead Costs Favorable/Unfavorable Applied Actual Results Variance Variable overhead applied 260 Favorable Fixed overhead applied 1.20 Unfavorable Unfavorable Total overhead variance 24 3.80
Direct material (30 pounds @ $2.60 per pound) Direct labor (20 hours @ $4,70 per DLH) Variable overhead (20 hours e $2.60 per DLH) Fixed overhead (20 hours @ $1.20 per DLH) Standard cost per unit $ 78.00 94.00 52.00 24.00 $ 248.00 The $3.80 ($2.60 + $1.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 36,600 units, which is 60% of the factory's capacity of 61,000 units per month. The following monthly flexible budget information is avallable. Operating Levels (X of capacity) 55% 33,550 671,000 Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted averhead Variable overhead Fixed overhead Total overhead 60% 36,600 732,000 65% 39,650 793,000 $ 1,744,600 878,400 $ 2,623,000 $ 1,903, 200 878,400 $ 2,781,600 $ 2,061,800 878, 400 $ 2,940, 200 During the current month, the company operated at 55% of capacity, direct labor of 652,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead Actual fixed overhead Actual total overhead $ 1,714,000 918,000 $ 2,632,000
Transcribed Image Text:Direct material (30 pounds @ $2.60 per pound) Direct labor (20 hours @ $4,70 per DLH) Variable overhead (20 hours e $2.60 per DLH) Fixed overhead (20 hours @ $1.20 per DLH) Standard cost per unit $ 78.00 94.00 52.00 24.00 $ 248.00 The $3.80 ($2.60 + $1.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 36,600 units, which is 60% of the factory's capacity of 61,000 units per month. The following monthly flexible budget information is avallable. Operating Levels (X of capacity) 55% 33,550 671,000 Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted averhead Variable overhead Fixed overhead Total overhead 60% 36,600 732,000 65% 39,650 793,000 $ 1,744,600 878,400 $ 2,623,000 $ 1,903, 200 878,400 $ 2,781,600 $ 2,061,800 878, 400 $ 2,940, 200 During the current month, the company operated at 55% of capacity, direct labor of 652,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead Actual fixed overhead Actual total overhead $ 1,714,000 918,000 $ 2,632,000
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