Hydro Sports budgets overhead cost of $540,000 for the year; of this amount, $315,000 is traceable to the Assembly department and $225,000 is traceable to the Finishing department. The company manufactures two types of jet skis: standard and deluxe. Budgeted direct labor hours for the standard model are 5 in Assembly and 2 in Finishing. Budgeted direct labor hours for the deluxe model are 10 in Assembly and 4 in Finishing. The company budgets production of 150 units of the standard model and 150 units of the deluxe model for the year. 1. Compute each department's total number of budgeted direct labor hours for the year. 2. Compute departmental overhead rates for each department using direct labor hours for that department. 3. Compute overhead cost per unit for each model using departmental overhead rates. Actual direct labor hours for the standard model are 5 in Assembly and 2 in Finishing. Actual direct labor hours for the deluxe model are 10 in Assembly and 4 in Finishing. Complete this question by entering your answers in the tabs below
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.
Please refer to the pictures for info and questions 1 and 2. See below for question 3 format.
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