Citi Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine hours. During February, the company used a denominator activity of 60,000 machine hours in computing its predetermined overhead rate. However, 75,000 standard machine hours were allowed for the month's actual production. If the fixed manufacturing overhead volume variance for February was $6,800 unfavorable, then the total budgeted fixed manufacturing overhead cost for the month was: a. $27,200 b. $81,600 c. $37,612 d. $30,000

Citi Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine hours. During February, the company used a denominator activity of 60,000 machine hours in computing its predetermined overhead rate. However, 75,000 standard machine hours were allowed for the month's actual production. If the fixed manufacturing overhead volume variance for February was $6,800 unfavorable, then the total budgeted fixed manufacturing overhead cost for the month was: a. $27,200 b. $81,600 c. $37,612 d. $30,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 58E: At the beginning of the year, Lopez Company had the following standard cost sheet for one of its...

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Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Unadjusted Cost of Goods Sold equals 1,500,000, unadjusted Work in Process equals 236,000, and unadjusted Finished Goods equals 180,000. Required: 1. Assume that the ending balances in the variance accounts are immaterial and prepare the journal entries to close them to Cost of Goods Sold. What is the adjusted balance in Cost of Goods Sold after closing out the variances? 2. What if any ending balance in a variance account that exceeds 10,000 is considered material? Close the immaterial variance accounts to Cost of Goods Sold and prorate the material variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. The prime cost in Cost of Goods Sold is 1,050,000, the prime cost in Work in Process is 165,200, and the prime cost in Finished Goods is 126,000. What are the adjusted balances in Work in Process, Finished Goods, and Cost of Goods Sold after closing out all variances? (Round ratios to four significant digits. Round journal entries to the nearest dollar.)
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