**Logistics Solutions Fulfillment Process**Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses to stock items for its clients. When a customer places an order, Logistics Solutions processes it by retrieving the item, packaging it, and shipping it to the customer. The company applies a predetermined variable overhead rate based on direct labor-hours.**Monthly Performance Overview:**- **Items Shipped:** 115,000- **Direct Labor-Hours Used:** 3,800- **Variable Overhead Costs Incurred:** $10,450**Company Standards:**- **Direct Labor-Hours per Item:** 0.04- **Variable Overhead Rate:** $2.80 per direct labor-hour**Financial Analysis Requirements:**1. **Standard Labor-Hours Allowed (SH):** Compute based on shipping 115,000 items.2. **Standard Variable Overhead Cost Allowed:** Calculate using standard labor-hours (SH) and the standard rate (SR).3. **Variable Overhead Spending Variance:** Determine the difference between actual overhead costs and the budget based on actual labor-hours.4. **Variable Overhead Rate Variance:** Analyze discrepancies in overhead cost per labor-hour.5. **Variable Overhead Efficiency Variance:** Evaluate the efficiency based on the difference between actual labor-hours and standard labor-hours allowed.*Note: For variances in requirements 3 and 4, indicate effects as "F" for favorable, "U" for unfavorable, and "None" for no variance. All amounts should be positive values.***Table of Analysis Results:**| 1. Standard quantity of labor-hours allowed | ____________ || 2. Standard variable overhead cost allowed | ____________ || 3. Variable overhead spending variance | ____________ || 4. Variable overhead rate variance | ____________ || 5. Variable overhead efficiency variance | ____________ |

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 variance?

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 variance?

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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