Mitchell Softball Gloves Company estimated the following at the beginning of the year: Assembly Department Testing Department Total Overhead $570,000 $130,000 $700,000 Direct Labour Hours 142,500 32,500 175,000 Machine Hours 32,000 65,000 97,000 Mitchell uses departmental overhead rates. In the assembly department, direct labour hours are used to apply overhead. Machine hours are used to apply overhead in the testing department. Actual data for August is as follows: Assembly Department Testing Department Total Overhead $42,000 $12,000 $54,000 Direct Labour Hours 13,500 2430 15,930 Machine Hours 4020 11,000 15,020 Mitchell decides to continue using departmental overhead rates. If a job spends 4 hours in assembly and 3 hours in testing, what is the amount of overhead charged to the job? a. $20 b. $22 c. $28 d. $50
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.
Mitchell Softball Gloves Company estimated the following at the beginning of the year: Assembly Department Testing Department Total
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