Q- 2: Salado Company has a standard cost system in which it applies overhead to products based on the standard direct labour-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Total budgeted fixed overhead cost for the year $300,000 Budgeted standard direct labour-hours (denominator level of activity) 50,000 Hours Actual direct labour-hours 49,000 Hours Standard direct labour-hours allowed for the actual output 48,000 Hours Actual fixed overhead cost for the year $295,500 Required: 1. Compute the fixed portion of the predetermined overhead rate for the year. 2. Compute the fixed overhead budget and volume variances.

Managerial Accounting: The Cornerstone of Business Decision-Making
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter10: Standard Costing And Variance Analysis
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Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...
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Q- 2:
Salado Company has a standard cost system in which it applies
overhead to products based on the standard direct labour-hours
allowed for the actual output of the period. Data concerning the
most recent year appear below:
Total budgeted fixed overhead cost for the year
$300,000
Budgeted standard direct labour-hours (denominator level of
activity) 50,000 Hours
Actual direct labour-hours
49,000
Hours
Standard direct labour-hours allowed for the actual output
48,000 Hours
Actual fixed overhead cost for the year
$295,500
Required:
1. Compute the fixed portion of the predetermined overhead rate
for the year.
2. Compute the fixed overhead budget and volume variances.
Transcribed Image Text:Q- 2: Salado Company has a standard cost system in which it applies overhead to products based on the standard direct labour-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Total budgeted fixed overhead cost for the year $300,000 Budgeted standard direct labour-hours (denominator level of activity) 50,000 Hours Actual direct labour-hours 49,000 Hours Standard direct labour-hours allowed for the actual output 48,000 Hours Actual fixed overhead cost for the year $295,500 Required: 1. Compute the fixed portion of the predetermined overhead rate for the year. 2. Compute the fixed overhead budget and volume variances.
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