**Logistics Solutions - Order Fulfillment Services Analysis**Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.---### Monthly Performance Data- **Items Shipped:** 165,000- **Direct Labor-Hours Used:** 6,800- **Variable Overhead Costs Incurred:** $22,100---### Company Standards- **Direct Labor-Hours per Item:** 0.04- **Variable Overhead Rate:** $3.30 per direct labor-hour---### Required Analysis1. **Standard Labor-Hours Allowed (SH) for 165,000 Items:**2. **Standard Variable Overhead Cost (SH × SR) for 165,000 Items:**3. **Variable Overhead Spending Variance:**4. **Variable Overhead Efficiency Variance:**---### Calculation Framework#### Standard Quantities and Rates- **SH (Standard Hours)** = Number of Items × Direct Labor-Hours per Item- **SR (Standard Rate)** = Variable Overhead Rate per Direct Labor-Hour#### Variance Calculations- **Variable Overhead Spending Variance:** Compare actual overhead costs to the expected costs based on actual hours worked.- **Variable Overhead Efficiency Variance:** Compare standard hours for actual production to actual hours used.### Table for Variance Analysis| | Favorable "F" | Unfavorable "U" | None (Zero Variance) "None" ||--------------------------|:-------------:|:---------------:|:----------------------------:|| Standard quantity of labor-hours allowed | F / U / None | F / U / None | F / U / None || Standard variable overhead cost allowed | F / U / None | F / U / None | F / U / None || Variable overhead spending variance | F / U / None | F / U / None | F / U / None || Variable overhead rate variance | F / U / None | F / U / None |

Name: **Logistics Solutions - Order Fulfillment Services Analysis**Logistic
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Description: **Logistics Solutions - Order Fulfillment Services Analysis**Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an o

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Business

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Required: 1. What is the standard labor-hours allowed (SH) to ship 165,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 165,000 items to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficiency variance?

Required: 1. What is the standard labor-hours allowed (SH) to ship 165,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 165,000 items to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficiency variance?

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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