el and Sons Inc. uses a standard cost system to apply factory overhead costs to units pro- plant is defined as 50,700 machine hours per year, which represents 25,350 units of outs tory overhead costs are $253,500 and the budgeted variable factory overhead cost rate erhead costs are applied on the basis of standard machine hours allowed for units produc put for the year was 18,700 units, which took 39,700 machine hours. Actual fixed factory c ounted to $248,300 while the actual variable overhead cost per unit was $2.10.
el and Sons Inc. uses a standard cost system to apply factory overhead costs to units pro- plant is defined as 50,700 machine hours per year, which represents 25,350 units of outs tory overhead costs are $253,500 and the budgeted variable factory overhead cost rate erhead costs are applied on the basis of standard machine hours allowed for units produc put for the year was 18,700 units, which took 39,700 machine hours. Actual fixed factory c ounted to $248,300 while the actual variable overhead cost per unit was $2.10.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Required information
[The following information applies to the questions displayed below.)
Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for
the plant is defined as 50,700 machine hours per year, which represents 25,350 units of output. Annual budgeted fixed
factory overhead costs are $253,500 and the budgeted variable factory overhead cost rate is $2.20 per unit. Factory
overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual
output for the year was 18,700 units, which took 39,700 machine hours. Actual fixed factory overhead costs for the year
amounted to $248,300 while the actual variable overhead cost per unit was $2.10.
Based on the information provided above, provide the correct summary journal entries for actual and applied factory overhead costs
(both variable and fixed) for the year. Assume that the company uses a single account, Factory Overhead, to record both actual and
applied factory overhead. Also, assume that the only variable overhead cost was electricity and that actual fixed overhead consisted of
depreciation of $153,000 and supervisory salaries of $95,300 Finally, assume that both electricity expense and the supervisory
salaries expense have been incurred but not yet paid (i.e., both are current liabilities). (Do not round intermediate calculations. Round
your final answers to nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
View transaction list
Journal entry worksheet
A B
Record the actual overhead costs.
![!
Required information
[The following information applies to the questions displayed below.]
Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for
the plant is defined as 50,700 machine hours per year, which represents 25,350 units of output. Annual budgeted fixed
factory overhead costs are $253,500 and the budgeted variable factory overhead cost rate is $2.20 per unit. Factory
overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual
output for the year was 18,700 units, which took 39,700 machine hours. Actual fixed factory overhead costs for the year
amounted to $248,300 while the actual variable overhead cost per unit was $2.10.
Based on the information provided above, provide the correct summary journal entries for actual and applied factory overhead costs
(both variable and fixed) for the year. Assume that the company uses a single account, Factory Overhead, to record both actual and
applied factory overhead. Also, assume that the only variable overhead cost was electricity and that actual fixed overhead consisted of
depreciation of $153,000 and supervisory salaries of $95,300 Finally, assume that both electricity expense and the supervisory
salaries expense have been incurred but not yet paid (l.e., both are current liabilities). (Do not round intermediate calculations. Round
your final answers to nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
View transaction list
Journal entry worksheet
< A
Record the overhead costs applied to production.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F55f14fd3-4860-4450-9a31-55c6b0050e6e%2F4f53b5b2-b152-4daf-b269-5583b532ab69%2F6qlrp2k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for
the plant is defined as 50,700 machine hours per year, which represents 25,350 units of output. Annual budgeted fixed
factory overhead costs are $253,500 and the budgeted variable factory overhead cost rate is $2.20 per unit. Factory
overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual
output for the year was 18,700 units, which took 39,700 machine hours. Actual fixed factory overhead costs for the year
amounted to $248,300 while the actual variable overhead cost per unit was $2.10.
Based on the information provided above, provide the correct summary journal entries for actual and applied factory overhead costs
(both variable and fixed) for the year. Assume that the company uses a single account, Factory Overhead, to record both actual and
applied factory overhead. Also, assume that the only variable overhead cost was electricity and that actual fixed overhead consisted of
depreciation of $153,000 and supervisory salaries of $95,300 Finally, assume that both electricity expense and the supervisory
salaries expense have been incurred but not yet paid (l.e., both are current liabilities). (Do not round intermediate calculations. Round
your final answers to nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
View transaction list
Journal entry worksheet
< A
Record the overhead costs applied to production.
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