Selected data for the consulting department of Austin Consulting, Inc., follow: Estimated consulting overhead cost for the year $440,000 Estimated direct labor cost for the year (@ $9/hr.) 180,000 Actual manufacturing overhead cost for January 19,500 Actual direct labor cost for January (1,200 hours) 11,000 Assuming that direct labor hours is the basis for applying consulting overhead, a. Calculate the predetermined overhead rate. $Answer per direct labor hour b. Prepare a journal entry that applies consulting overhead for January. General Journal Description Debit Credit AnswerConsulting overheadCost of goods soldFinished goods inventoryWork in process inventory Answer Answer AnswerConsulting overheadCost of goods soldFinished goods inventoryWork in process inventory Answer Answer c. By what amount is consulting overhead over- or under applied in January? $ Answer. Over or under applied?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Selected data for the consulting department of Austin Consulting, Inc., follow:
| Estimated consulting |
$440,000 |
| Estimated direct labor cost for the year (@ $9/hr.) | 180,000 |
| Actual |
19,500 |
| Actual direct labor cost for January (1,200 hours) | 11,000 |
Assuming that direct labor hours is the basis for applying consulting overhead,
a. Calculate the predetermined overhead rate. $Answer per direct labor hour
b. Prepare a
| General Journal | ||
|---|---|---|
| Description | Debit | Credit |
| AnswerConsulting overheadCost of goods soldFinished goods inventoryWork in process inventory | Answer | Answer |
| AnswerConsulting overheadCost of goods soldFinished goods inventoryWork in process inventory | Answer | Answer |
c. By what amount is consulting overhead over- or under applied in January?
$ Answer. Over or under applied?
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