A company uses direct labor hours as its overhead allocation base. Its standard amount per allocation base is 2 direct labor hours per unit. A flexible overhead budget at the expected level of production of 5,640 units follows. Variable overhead Fixed overhead Total overhead Flexible Overhead Budget at 5,640 units (80% capacity) $ 224,000 128,000 $ 360,960 During this period, the company actually produced 5,840 units and incurred total overhead costs of $306,250. 1. Calculate the standard overhead rate. 2. Determine the standard overhead applied. 3. Determine the total overhead variance and indicate whether it is favorable or unfavorable. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. 1. Standard overhead rate 2. Standard overhead applied 3. Overhead variance per DLH
A company uses direct labor hours as its overhead allocation base. Its standard amount per allocation base is 2 direct labor hours per unit. A flexible overhead budget at the expected level of production of 5,640 units follows. Variable overhead Fixed overhead Total overhead Flexible Overhead Budget at 5,640 units (80% capacity) $ 224,000 128,000 $ 360,960 During this period, the company actually produced 5,840 units and incurred total overhead costs of $306,250. 1. Calculate the standard overhead rate. 2. Determine the standard overhead applied. 3. Determine the total overhead variance and indicate whether it is favorable or unfavorable. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. 1. Standard overhead rate 2. Standard overhead applied 3. Overhead variance per DLH
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 7EB: A company estimates its manufacturing overhead will be $840,000 for the next year. What is the...
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