Predetermined overhead rate for the year Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

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Chapter 10A, Problem 10A.3E

1

To determine

Predetermined overhead rate for the year

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

2

To determine

Amount of the overhead that would be applied to the output of the period.

Introduction: Variance means the difference in value which comes when actual figure and estimated or budgeted figure are compared. It is helpful in finding out the cause of difference that arises between figures and formulates the corrective measure, which helps to reduce all those difficulties.

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Applying Overhead in a Standard Costing System Privack Corporation has a standard cost system in which it applies overhead to products base the standard direct labor-hours allowed for the actual output of the period. Data concerning most recent year appear below: Required: 1. Compute the predetermined overhead rate for the year. Be sure to include the total budget fixed overhead and the total budgeted variable overhead in the numerator of your rate. 2. Compute the amount of overhead that would be applied to the output of the period.

Exercise 10A-3 (Algo) Applylng Overhead In a Standard CostIng System [LO10-4] Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Budgeted variable overhead cost per direct labor-hour Total budgeted fixed overhead cost per year Budgeted direct labor-hours (denominator level of activity) Actual direct labor-hours Standard direct labor-hours allowed for the actual output 4.50 $ 563,213 59, 288 82, 000 81,600 Requlred: 1. Compute the predetermined overhead rate for the year. Be sure to include the total budgeted fxed overhead and the total budgeted variable overhead in the numerator of yourrate. (Round your answer to the neorest whole dellar emnount.). 2. Compute the amount of overhead that would be applied to the outout of the period. (Round your Intermedlate calculetions and final answer to the nearest whole doller…

Exercise 10A-3 (Algo) Applying Overhead in a Standard Costing System [LO10-4] Privack Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Budgeted variable overhead cost per direct labor-hour Total budgeted fixed overhead cost per year Budgeted direct labor-hours (denominator level of activity) Actual direct labor-hours Standard direct labor-hours allowed for the actual output Required: 1. Compute the predetermined overhead rate for the year. Be sure to include the total budgeted fixed overhead and the total budgeted variable overhead in the numerator of your rate. (Round your answer to the nearest whole dollar amount.) 2. Compute the amount of overhead that would be applied to the output of the period. (Round your intermediate calculations and final answer to the nearest whole dollar amount.) 1. Predetermined overhead rate…