Various predetermined factory overhead rates. Colossal Corporation estimates factory overhead of $207,000 for the next fiscal year. It is estimated that 52,100 units will be produced at a materials cost of $500,000. Conversion will require an estimated 85,000 labor hours at a cost of $9 per hour, with 69,000 machine hours. Required: Calculate the predetermined factory overhead rate based on: (1) Materials cost. (2) Units of production. (3) Machine hours. (4) Direct labor cost. (5) Direct labor hours. Compute percentages to the nearest percent and dollar amounts to the nearest cent.
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.
Various predetermined factory
Required: Calculate the predetermined factory overhead rate based on:
(1) Materials cost.
(2) Units of production.
(3) Machine hours.
(4) Direct labor cost.
(5) Direct labor hours.
Compute percentages to the nearest percent and dollar amounts to the nearest cent.
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