Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses which stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 130,000 items were shipped to customers using 4,700 direct labor-hours. The company incurred a total of $13,630 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.95 per direct labor-hour. Required: 1. According to the standards, what variable overhead cost should have been incurred to fill the orders for the 130,000 items? How much does this differ from the actual variable overhead cost? (Round labor-hours per item and overhead cost per hour to 2 decimal places.)

Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses which stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 130,000 items were shipped to customers using 4,700 direct labor-hours. The company incurred a total of $13,630 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.95 per direct labor-hour. Required: 1. According to the standards, what variable overhead cost should have been incurred to fill the orders for the 130,000 items? How much does this differ from the actual variable overhead cost? (Round labor-hours per item and overhead cost per hour to 2 decimal places.)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 33P: Big Mikes, a large hardware store, has gathered data on its overhead activities and associated costs...

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Seved Logistics Solutions provides order fulfillment services for dot.com merchants. The icompany maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 110,000 items were shipped to customers using 3,500 direct labor-hours. The company incurred a total of $9,450 in varlable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.75 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 110,000 items to customers? 2. What is the standard variable overhead cost allowed (SH SR) to ship 110,000 items to customers? 3. What is the variable overhead spending…
Logistics Solutions provides order fulfilment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 160,000 items were shipped to customers using 6,500 direct labor-hours. The company incurred a total of $20,800 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.25 per direct labor-hour. Requlred: 1. What is the standard labor-hours allowed (SH) to ship 160.000 items to customers? 2 What is the standard variable overhead cost allowed (SH x SR) to ship 160,000 items to customers? 3. What is the variable overhead spending variance?…
Logistics Solutions provides order fulfillment services for dot-com merchants. The company maintainswarehouses that stock items carried by its dot-com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and shipsit to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.In the most recent month, 120,000 items were shipped to customers using 2,300 direct labor-hours.The company incurred a total of $7,360 in variable overhead costs.According to the company’s standards, 0.02 direct labor-hours are required to fulfill an order for oneitem and the variable overhead rate is $3.25 per direct labor-hour.Required:1. What variable overhead cost should have been incurred to fill the orders for the 120,000 items? Howmuch does this differ from the actual variable overhead cost?2. Break down the difference computed in (1) above into a variable overhead rate…
Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 115,000 items were shipped to customers using 3,800 direct labor-hours. The company incurred a total of $10,450 in variable overhead costs. According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.80 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 115,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 115,000 items to customers? 3. What is the variable overhead spending…
Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 110,000 items were shipped to customers using 3,500 direct labor-hours. The company incurred a total of $9,450 in variable overhead costs. According to the company’s standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.75 per direct labor-hour. Required: 4. What is the variable overhead rate variance and the variable overhead efficiency variance? (For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no…
Help ogistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items arried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which oulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 110,000 items were shipped to customers using 3,500 direct labor-hours. The company incurred a total of $9,450 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.75 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 110,000 items to customers? 2. What is the standard variable overhead cost allowed (SH × SR) to ship 110,000 items to customers? 3. What is the variable overhead spending…
Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 135,000 items were shipped to customers using 5,000 direct labor-hours. The company incurred a total of $14,750 in variable overhead costs. According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.00 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 135,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 135,000 items to customers? 3. What is the variable overhead spending…
Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 120,000 items were shipped to customers using 4,100 direct labor-hours. The company incurred a total of $11480 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfll an order for one item and the variable overhead rate is $2.85 per direct labor-hour. Required: 1. According to the standards, what variable overhead cost should have been incurred to fill the orders for the 120,000 items? How much does this differ from the actual variable overhead cost? (Round labor-hours per item and overhead cost…
Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 185,000 items were shipped to customers using 8,000 direct labor-hours. The company incurred a total of $27,600 in variable overhead costs. According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.50 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 185,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 185,000 items to customers? 3. What is the variable overhead spending…
Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 170,000 items were shipped to customers using 7,100 direct labor-hours. The company incurred a total of $23,430 in variable overhead costs. According to the company’s standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.35 per direct labor-hour. Required: What is the standard labor-hours allowed (SH) to ship 170,000 items to customers? What is the standard variable overhead cost allowed (SH × SR) to ship 170,000 items to customers? What is the variable overhead spending variance? What…
Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 155,000 items were shipped to customers using 6,000 direct labor-hours. The company incurred a total of $17,400 in variable overhead costs. According to the company’s standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.00 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 155,000 items to customers? 2. What is the standard variable overhead cost allowed (SH × SR) to ship 155,000 items to customers? 3. What is the variable overhead spending…
Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 140,000 items were shipped to customers using 5,300 direct labor hours. The company incurred a total of $15.900 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.05 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 140,000 items to customers? 2. What is the standard variable overhead cost allowed (SH SR) to ship 140.000 items to customers? 3. What is the variable overhead spending variance?…