MANAGERIAL ACCT.F/MANAGERS>CUSTOM<
4th Edition
ISBN: 9781307090147
Author: Noreen
Publisher: MCG/CREATE
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Chapter 11A, Problem 11A.6E
1.
To determine
Introduction:
To compute: Predetermined overhead rate and break it down into variable and fixed elements.
2.
To determine
Introduction: Overhead means the ongoing business expenses which are not directly incurred while producing product or service. Overhead is important while preparing budget but it is also used to determine the amount company must charge in order to incur profit mapping the formal plan.
To compute: The
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Marites Company employs standard absorption system for product costing. The standard cost of this product is as follows: Raw Materials – P14.50; Direct Labor for 2 hours @ P8/hr is P16; Manufacturing overhead for 2 hours @ P11/hr is P22. The total cost/unit (14.50+16+22) = P52.50. The manufacturing overhead rate is based upon normal annual activity level of 600,000 direct labor hours. The company planned to produce 25,000 units each month during 2020. Budgeted factory overhead for 2020 is composed of P3,600,000 variable and P3,000,000 fixed. During April 2021, 26,000 units of product were produced using 53,500 direct labor hours at a cost of P433,350. Actual manufacturing overhead for the month was P260,000 fixed and P315,000 variable. The total manufacturing overhead applied during April was P572,000. The variable overhead spending variance must be:
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PT corp makes 300 units of A per year. At this level, the cost per unit includes $360 in direct materials, $1,000 in direct labor, $240 in variable overhead, and $900 in fixed overhead. An outside supplier has offered to make all 300 units for $2,100 per unit. If PT accepts this offer, two thirds of the fixed overhead would persist, but would be defrayed by renting out the floor space for $72,000 per year.
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Chapter 11A Solutions
MANAGERIAL ACCT.F/MANAGERS>CUSTOM<
Ch. 11A - Fixed Overhead Variances LO10—4 Primara...Ch. 11A - Prob. 11A.2ECh. 11A - Prob. 11A.3ECh. 11A - Prob. 11A.4ECh. 11A - Prob. 11A.5ECh. 11A - Prob. 11A.6ECh. 11A - Prob. 11A.7ECh. 11A - Applying Overhead; Overhead Variances LO10—3,...Ch. 11A - Prob. 11A.9PCh. 11A - Comprehensive Standard Cost Variances LO10—1,...
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