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ortation has B0 minutes fo ster a new ca cermined fixe

ortation has B0 minutes fo ster a new ca cermined fixe

FINANCIAL ACCOUNTING
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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The manager of the Texas Department of Transportation has determined that it typically takes 30 minutes for the department's employees to register a new car. In Bexar County, the predetermined fixed overhead rate was computed on an estimated 16,000 direct labor hours per month and is $9 per direct labor hour, whereas the predetermined variable overhead rate is $3 per direct labor hour. During July, 30,080 cars were registered in Bexar County, and 15,200 direct labor hours were worked in registering those vehicles. For the month, variable overhead was $44,320 and fixed overhead was $145,280. a. Compute overhead variances using a four- variance approach. b. Compute overhead variances using a three- variance approach. c. Compute overhead variances using a two- variance approach.
Transcribed Image Text:The manager of the Texas Department of Transportation has determined that it typically takes 30 minutes for the department's employees to register a new car. In Bexar County, the predetermined fixed overhead rate was computed on an estimated 16,000 direct labor hours per month and is $9 per direct labor hour, whereas the predetermined variable overhead rate is $3 per direct labor hour. During July, 30,080 cars were registered in Bexar County, and 15,200 direct labor hours were worked in registering those vehicles. For the month, variable overhead was $44,320 and fixed overhead was $145,280. a. Compute overhead variances using a four- variance approach. b. Compute overhead variances using a three- variance approach. c. Compute overhead variances using a two- variance approach.
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