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(1) The predetermined overhead rate based on normal capacity. (2) The predetermined overhead rate based on expected actual capacity. (3) The amount of factory overhead applied to production if the company used the normal overhead rate. ny used the expected

(1) The predetermined overhead rate based on normal capacity. (2) The predetermined overhead rate based on expected actual capacity. (3) The amount of factory overhead applied to production if the company used the normal overhead rate. ny used the expected

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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5. Factory overhead application and analysis. Normal capacity of the Duro Company is set at 90,000 direct labor hours. The expected operating level for the period just completed was 72,000 hours. At this expected actual capacity level, the variable expense was estimated to be $54,000 and the fixed expense, $36,000. Actual results show 75,000 hours were worked during the period. Required: (1) The predetermined overhead rate based on normal capacity. (2) The predetermined overhead rate based on expected actual capacity. (3) The amount of factory overhead applied to production if the company used the normal overhead rate. (4) The amount of factory overhead applied to production if the company used the expected actual overhead rate. (5) Variance computations to show whether there would be a favorable idle capacity variance if the normal capacity rate were used. (6) Variance computations to show whether there would be a favorable idle capacity variance if the expected actual rate were used. untant of the Gor
Transcribed Image Text:5. Factory overhead application and analysis. Normal capacity of the Duro Company is set at 90,000 direct labor hours. The expected operating level for the period just completed was 72,000 hours. At this expected actual capacity level, the variable expense was estimated to be $54,000 and the fixed expense, $36,000. Actual results show 75,000 hours were worked during the period. Required: (1) The predetermined overhead rate based on normal capacity. (2) The predetermined overhead rate based on expected actual capacity. (3) The amount of factory overhead applied to production if the company used the normal overhead rate. (4) The amount of factory overhead applied to production if the company used the expected actual overhead rate. (5) Variance computations to show whether there would be a favorable idle capacity variance if the normal capacity rate were used. (6) Variance computations to show whether there would be a favorable idle capacity variance if the expected actual rate were used. untant of the Gor
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