Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct labor hours. Information from LLL’s standard cost card follows: Standard Quantity Standard Rate Standard Unit Cost Variable manufacturing overhead 0.6 $0.80 $0.48 During August, LLL had the following actual results: Units produced and sold 26,300 Actual variable overhead $ 9,590 Actual direct labor hours 17,000 Required: Compute LLL’s variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Lamp Light Limited (LLL) manufactures lampshades. It applies variable
| Standard Quantity | Standard Rate | Standard Unit Cost | |
| Variable manufacturing overhead | 0.6 | $0.80 | $0.48 |
During August, LLL had the following actual results:
| Units produced and sold | 26,300 | |
| Actual variable overhead | $ | 9,590 |
| Actual direct labor hours | 17,000 | |
Required:
Compute LLL’s variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
What is the variable overhead rate variance?
17,000 X (.80-.56)= 4,080
states not correct
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
