Platzer Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $104,040. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit: Instruments Budgeted Production Volume Direct Labor Hours Per Unit Flutes 2,300 units 0.5 Clarinets 400 1.6 Oboes 1,000 1.1 If required, round all per unit answers to the nearest cent. a. Determine the single plantwide overhead rate. fill in the blank 1 of 1$ per direct labor hour b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products, Instruments Total Factory Overhead Cost Per Unit Factory Overhead Cost Flutes fill in the blank 1 of 7$ fill in the blank 2 of 7$ Clarinets fill in the blank 3 of 7 fill in the blank 4 of 7 Oboes fill in the blank 5 of 7 fill in the blank 6 of 7 Total fill in the blank 7 of 7$
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.
Single plantwide factory
Platzer Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted
| Instruments | Budgeted Production Volume |
Direct Labor Hours Per Unit |
|---|---|---|
| Flutes | 2,300 units | 0.5 |
| Clarinets | 400 | 1.6 |
| Oboes | 1,000 | 1.1 |
If required, round all per unit answers to the nearest cent.
a. Determine the single plantwide overhead rate.
fill in the blank 1 of 1$ per direct labor hour
b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products,
| Instruments | Total Factory Overhead Cost |
Per Unit Factory Overhead Cost |
|---|---|---|
| Flutes | fill in the blank 1 of 7$ | fill in the blank 2 of 7$ |
| Clarinets | fill in the blank 3 of 7 | fill in the blank 4 of 7 |
| Oboes | fill in the blank 5 of 7 | fill in the blank 6 of 7 |
| Total | fill in the blank 7 of 7$ |
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