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Zepol Company is planning to produce 600,000 power drills for the coming year. The company uses direct labor hours to assign overhead to products. Each drill requires 0.75 standard hour of labor for completion. The total budgeted overhead was $1,777,500. The total fixed overhead budgeted for the coming year is $832,500. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. Actual results for the year are: Required: 1. Compute the applied fixed overhead. 2. Compute the fixed overhead spending and volume variances. 3. Compute the applied variable overhead. 4. Compute the variable overhead spending and efficiency variances.

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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773
BuyFind

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773

Solutions

Chapter
Section
Chapter 10, Problem 59E
Textbook Problem

Zepol Company is planning to produce 600,000 power drills for the coming year. The company uses direct labor hours to assign overhead to products. Each drill requires 0.75 standard hour of labor for completion. The total budgeted overhead was $1,777,500. The total fixed overhead budgeted for the coming year is $832,500. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. Actual results for the year are:

Chapter 10, Problem 59E, Zepol Company is planning to produce 600,000 power drills for the coming year. The company uses

Required:

  1. 1. Compute the applied fixed overhead.
  2. 2. Compute the fixed overhead spending and volume variances.
  3. 3. Compute the applied variable overhead.
  4. 4. Compute the variable overhead spending and efficiency variances.

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Chapter 10 Solutions

Managerial Accounting: The Cornerstone of Business Decision-Making
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