Milton6 Company uses a standard cost system in which manufacturing overhead costs are applied to units of product (widgets) on the basis of direct labor hours. Standards call for 2 direct labor hours per widget. The standard labor rate is $10 per hour. Four pounds of material are needed for each widget at a standard cost of $2.25 per pound. The standard variable overhead rate is $3.50 per direct labor hour. Milton6 actually produces 17,000 widgets during the year. Direct labor costs are S359,100 for 34,200 hours. Milton6 purchases 70,000 pounds of materials at $2.50 per pound, and used 65,400 pounds of those materials (the rest are in inventory at the end of the year) Actual variable overhead costs $92,000. For variable overhead, compute the spending(price) variance and label it is favorable (F) or unfavorable (U). А. 700 F B. 32,500 F C. 27,700 U D. 700 U E. 32,500 U F. 27,700 F G. 27,000 U Н. 27,000 F

Milton6 Company uses a standard cost system in which manufacturing overhead costs are applied to units of product (widgets) on the basis of direct labor hours. Standards call for 2 direct labor hours per widget. The standard labor rate is $10 per hour. Four pounds of material are needed for each widget at a standard cost of $2.25 per pound. The standard variable overhead rate is $3.50 per direct labor hour. Milton6 actually produces 17,000 widgets during the year. Direct labor costs are S359,100 for 34,200 hours. Milton6 purchases 70,000 pounds of materials at $2.50 per pound, and used 65,400 pounds of those materials (the rest are in inventory at the end of the year) Actual variable overhead costs $92,000. For variable overhead, compute the spending(price) variance and label it is favorable (F) or unfavorable (U). А. 700 F B. 32,500 F C. 27,700 U D. 700 U E. 32,500 U F. 27,700 F G. 27,000 U Н. 27,000 F

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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