Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows. Indirect labor $1.40 Indirect materials 0.80 Utilities 0.30 Fixed overhead costs per month are Supervision $3,800, Depreciation $1,700, and Property Taxes $500. The company believes it will normally operate in a range of 7,400–11,600 direct labor hours per month. Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs. Variable Costs Fixed Costs Indirect labor $14,010 Supervision $3,800 Indirect materials 8,030 Depreciation 1,700 Utilities 2,650 Property taxes 500
Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows. Indirect labor $1.40 Indirect materials 0.80 Utilities 0.30 Fixed overhead costs per month are Supervision $3,800, Depreciation $1,700, and Property Taxes $500. The company believes it will normally operate in a range of 7,400–11,600 direct labor hours per month. Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs. Variable Costs Fixed Costs Indirect labor $14,010 Supervision $3,800 Indirect materials 8,030 Depreciation 1,700 Utilities 2,650 Property taxes 500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Exercise 22-4
Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.
Fixed overhead costs per month are Supervision $3,800,Depreciation $1,700, and Property Taxes $500. The company believes it will normally operate in a range of 7,400–11,600 direct labor hours per month.
Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs.
| Indirect labor | $1.40 | |
| Indirect materials | 0.80 | |
| Utilities | 0.30 |
Fixed overhead costs per month are Supervision $3,800,
Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs.
|
Variable Costs
|
Fixed Costs
|
|||||
| Indirect labor | $14,010 | Supervision | $3,800 | |||
| Indirect materials | 8,030 | Depreciation | 1,700 | |||
| Utilities | 2,650 | Property taxes | 500 |
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