Question 2 CRAZY Co, is a major producer of beauty products. The company uses a standard cost system to help control costs. Manufacturing overhead is applied to production on the basis of standard direct labor-hours. The company has a standard of 10 labor hours per unit. According to the company's planning budget, the following manufacturing overhead costs should be incurred at an activity level of 17,500 labor-hours (the denominator activity level): Variable manufacturing overhead cost . ....$ 175,000 Fixed manufacturing overhead cost . . . .. Total manufacturing overhead cost ........ $595,000 $420,000 During the most recent year, the following operating results were recorded: Activity: Actual Production. . .... Total Actual labor-hours worked . . ... 1,600 15,000 Cost: Actual variable manufacturing overhead cost incurred ..... $156,000 Actual fixed manufacturing overhead cost incurred . . $418,800

Question 2 CRAZY Co, is a major producer of beauty products. The company uses a standard cost system to help control costs. Manufacturing overhead is applied to production on the basis of standard direct labor-hours. The company has a standard of 10 labor hours per unit. According to the company's planning budget, the following manufacturing overhead costs should be incurred at an activity level of 17,500 labor-hours (the denominator activity level): Variable manufacturing overhead cost . ....$ 175,000 Fixed manufacturing overhead cost . . . .. Total manufacturing overhead cost ........ $595,000 $420,000 During the most recent year, the following operating results were recorded: Activity: Actual Production. . .... Total Actual labor-hours worked . . ... 1,600 15,000 Cost: Actual variable manufacturing overhead cost incurred ..... $156,000 Actual fixed manufacturing overhead cost incurred . . $418,800

Name: Q) Prepare journal entries for variable and fixed manufacturing overhe
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Description: Q) Prepare journal entries for variable and fixed manufacturing overhead costs and variances;write off these variances to cost of goods sold. Question 2CRAZY Co, is a major producer of beauty products. The company uses a standard cost system tohelp c

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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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Q) Prepare journal entries for variable and fixed manufacturing overhead costs and variances;
write off these variances to cost of goods sold.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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