1. Normal capacity of Evert Company is 120,000 direct labour hours. The expected capacity for the month just completed was 90,000 direct labour hours. Estimated FOH at expected level is $150,000. The variable portion of overhead comprises of 30% of total estimated overhead. Actual results show 95000 hours were worked during the period. Compute the followings: a) Applied FOH based on rate determined at Normal capacity. b) Idle Capacity variance if expected capacity's rates are used. 2. The following information is available for March: A/P, March 1 6000 WIP, March 1 30,000 Finished Goods, March 1 50,000 Material, March 31 15,000 A/P, March 31 10,000 Finished Goods, March 31 60,000 Actual FOH 150,000 Cost of Goods Sold 300,000 A/P paid during the month FOH is applied at 200% of direct labour cost. Jobs still in progress on March 31 have been charged $6,000 for material and $12,000 for direct labour (1500 hours). Actual direct labour hours, 10,000 at $8 per hour. Required: 35,000 a. Material purchased b. Cost of goods manufactured c. WIP, March 31 d. Over or under Applied FOH

1. Normal capacity of Evert Company is 120,000 direct labour hours. The expected capacity for the month just completed was 90,000 direct labour hours. Estimated FOH at expected level is $150,000. The variable portion of overhead comprises of 30% of total estimated overhead. Actual results show 95000 hours were worked during the period. Compute the followings: a) Applied FOH based on rate determined at Normal capacity. b) Idle Capacity variance if expected capacity's rates are used. 2. The following information is available for March: A/P, March 1 6000 WIP, March 1 30,000 Finished Goods, March 1 50,000 Material, March 31 15,000 A/P, March 31 10,000 Finished Goods, March 31 60,000 Actual FOH 150,000 Cost of Goods Sold 300,000 A/P paid during the month FOH is applied at 200% of direct labour cost. Jobs still in progress on March 31 have been charged $6,000 for material and $12,000 for direct labour (1500 hours). Actual direct labour hours, 10,000 at $8 per hour. Required: 35,000 a. Material purchased b. Cost of goods manufactured c. WIP, March 31 d. Over or under Applied FOH

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Description: 1. Normal capacity of Evert Company is 120,000 direct labour hours. The expected capacity for themonth just completed was 90,000 direct labour hours. Estimated FOH at expected level is $150,000.The variable portion of overhead comprises of 30% of to

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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