Question:43 Eastern Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor hours (DLHs). To prepare overhead rates, the company estimates that 300,000 units will be produced, requiring 60,000 DLHs. The maximum capacity is 400,000 units of 80,000 labor hours. Standard quantities, prices, and costs are below: Direct materials Direct labor Per Unit Standards 0.25 kilogram Standard Price or Rate $16 per kilogram 0.20 DLH $10 per DLH Variable 0.20 DLH $5 per DLH Fixed overhead 0.20 DLH $10 per DLH Standard Cost $ 4 2 1 2 Actual results for the year are below:Units produced and sold - 330,000 Actual direct labor hours worked - 64,800Actual variable manufacturing overhead cost $327,240Actual fixed manufacturing overhead cost- $612,000.Compute the fixed manufacturing overhead volume variance. Show your complete solution. Eastern Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor hours (DLHs). To prepare overhead rates, the company estimates that 300,000 units will be produced, requiring 60,000 DLHs. The maximum capacity is 400,000 units of 80,000 labor hours. Standard quantities, prices, and costs are below: Per Unit Standards 0.25 kilogram Standard Price or Rate Standard Cost Direct $16 per kilogram $4 Direct labor 0.20 DLH $10 per DLH 2 Variable 0.20 DLH $5 per DLH 1 Fixed 0.20 DLH $10 per DLH 2 Actual results for the year are below: Units produced and sold - 330,000 Actual direct labor hours worked - 64,800 Actual variable manufacturing overhead cost- $327,240 Actual fixed manufacturing overhead cost - $612,000 Compute the fixed manufacturing overhead budget variance. Show your complete solution.

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Chapter6: Activity-based, Variable, And Absorption Costing
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Question:43
Eastern Company uses a standard cost system in which manufacturing
overhead is applied to units of product on the basis of standard direct
labor hours (DLHs). To prepare overhead rates, the company estimates
that 300,000 units will be produced, requiring 60,000 DLHs. The
maximum capacity is 400,000 units of 80,000 labor hours. Standard
quantities, prices, and costs are below:
Direct materials
Direct labor
Per Unit
Standards
0.25 kilogram
Standard Price or
Rate
$16 per kilogram
0.20 DLH
$10 per DLH
Variable
0.20 DLH
$5 per DLH
Fixed overhead
0.20 DLH
$10 per DLH
Standard
Cost
$ 4
2
1
2
Actual results for the year are below:Units produced and sold - 330,000
Actual direct labor hours worked - 64,800Actual variable manufacturing
overhead cost $327,240Actual fixed manufacturing overhead cost-
$612,000.Compute the fixed manufacturing overhead volume variance.
Show your complete solution.
Eastern Company uses a standard cost system in which manufacturing
overhead is applied to units of product on the basis of standard direct
labor hours (DLHs). To prepare overhead rates, the company estimates
that 300,000 units will be produced, requiring 60,000 DLHs. The
maximum capacity is 400,000 units of 80,000 labor hours. Standard
quantities, prices, and costs are below:
Per Unit
Standards
0.25 kilogram
Standard Price or
Rate
Standard
Cost
Direct
$16 per kilogram
$4
Direct labor
0.20 DLH
$10 per DLH
2
Variable
0.20 DLH
$5 per DLH
1
Fixed
0.20 DLH
$10 per DLH
2
Actual results for the year are below:
Units produced and sold - 330,000
Actual direct labor hours worked - 64,800
Actual variable manufacturing overhead cost- $327,240
Actual fixed manufacturing overhead cost - $612,000
Compute the fixed manufacturing overhead budget variance. Show
your complete solution.
Transcribed Image Text:Question:43 Eastern Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor hours (DLHs). To prepare overhead rates, the company estimates that 300,000 units will be produced, requiring 60,000 DLHs. The maximum capacity is 400,000 units of 80,000 labor hours. Standard quantities, prices, and costs are below: Direct materials Direct labor Per Unit Standards 0.25 kilogram Standard Price or Rate $16 per kilogram 0.20 DLH $10 per DLH Variable 0.20 DLH $5 per DLH Fixed overhead 0.20 DLH $10 per DLH Standard Cost $ 4 2 1 2 Actual results for the year are below:Units produced and sold - 330,000 Actual direct labor hours worked - 64,800Actual variable manufacturing overhead cost $327,240Actual fixed manufacturing overhead cost- $612,000.Compute the fixed manufacturing overhead volume variance. Show your complete solution. Eastern Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor hours (DLHs). To prepare overhead rates, the company estimates that 300,000 units will be produced, requiring 60,000 DLHs. The maximum capacity is 400,000 units of 80,000 labor hours. Standard quantities, prices, and costs are below: Per Unit Standards 0.25 kilogram Standard Price or Rate Standard Cost Direct $16 per kilogram $4 Direct labor 0.20 DLH $10 per DLH 2 Variable 0.20 DLH $5 per DLH 1 Fixed 0.20 DLH $10 per DLH 2 Actual results for the year are below: Units produced and sold - 330,000 Actual direct labor hours worked - 64,800 Actual variable manufacturing overhead cost- $327,240 Actual fixed manufacturing overhead cost - $612,000 Compute the fixed manufacturing overhead budget variance. Show your complete solution.
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