Question:89 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 materials $16 per kilogram $4 Direct labor 0.20 DLH $10 per DLH 2 Variable 0.20 DLH $5 per DLH 1 Fixed overhead 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 variable manufacturing overhead efficiency variance. Show your complete solution. Jake's Roof Repair has provided the following data concerning its costs: Fixed Cost per Month Cost per Repair Hour Wages and salaries $21,000 $ 15 Parts and supplies Equipment depreciation Truck operating $ 7.60 $2,790 $ 0.40 $5,770 $ 1.80 Rent Administrative $ 4,640 $ 3,900 $0.50 For example, wages and salaries should be $21,000 plus $15 per repair hour. The company expected to work 2,700 repair hours in May, but actually worked 2,600 repair hours. The company expects its sales to be $46 per repair hour.Required: Compute the company's activity variances for May.
Question:89 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 materials $16 per kilogram $4 Direct labor 0.20 DLH $10 per DLH 2 Variable 0.20 DLH $5 per DLH 1 Fixed overhead 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 variable manufacturing overhead efficiency variance. Show your complete solution. Jake's Roof Repair has provided the following data concerning its costs: Fixed Cost per Month Cost per Repair Hour Wages and salaries $21,000 $ 15 Parts and supplies Equipment depreciation Truck operating $ 7.60 $2,790 $ 0.40 $5,770 $ 1.80 Rent Administrative $ 4,640 $ 3,900 $0.50 For example, wages and salaries should be $21,000 plus $15 per repair hour. The company expected to work 2,700 repair hours in May, but actually worked 2,600 repair hours. The company expects its sales to be $46 per repair hour.Required: Compute the company's activity variances for May.
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Transcribed Image Text:Question:89
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 materials
$16 per kilogram
$4
Direct labor
0.20 DLH
$10 per DLH
2
Variable
0.20 DLH
$5 per DLH
1
Fixed overhead
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 variable manufacturing overhead efficiency variance.
Show your complete solution.
Jake's Roof Repair has provided the following data concerning its
costs:
Fixed Cost per
Month
Cost per Repair
Hour
Wages and salaries
$21,000
$ 15
Parts and supplies
Equipment depreciation
Truck operating
$ 7.60
$2,790
$ 0.40
$5,770
$ 1.80
Rent
Administrative
$ 4,640
$ 3,900
$0.50
For example, wages and salaries should be $21,000 plus $15 per repair
hour. The company expected to work 2,700 repair hours in May, but
actually worked 2,600 repair hours. The company expects its sales to
be $46 per repair hour.Required:
Compute the company's activity variances for May.
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