Crane Company produces one product, a putter called GO-Putter. Crane uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 125,000 units per year. The total budgeted overhead at normal capacity is $812,500 comprised of $312,500 of variable costs and $500,000 of fixed costs. Crane applies overhead on the basis of direct labor hours. During the current year, Crane produced 88,200 putters, worked 87,700 direct labor hours, and incurred variable overhead costs of $273,325 and fixed overhead costs of $333,300. (a) Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answers to 2 decimal places, e.g. 2.75.) Predetermined Overhead Rate $ Variable $ Fixed

Crane Company produces one product, a putter called GO-Putter. Crane uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 125,000 units per year. The total budgeted overhead at normal capacity is $812,500 comprised of $312,500 of variable costs and $500,000 of fixed costs. Crane applies overhead on the basis of direct labor hours. During the current year, Crane produced 88,200 putters, worked 87,700 direct labor hours, and incurred variable overhead costs of $273,325 and fixed overhead costs of $333,300. (a) Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answers to 2 decimal places, e.g. 2.75.) Predetermined Overhead Rate $ Variable $ Fixed

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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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