Required information [The following information applies to the questions displayed below.] Sedona Company set the following standard costs for one unit of its product for this year. Direct material (30 pounds @ $2.00 per pound) Direct labor (20 hours @ $4.50 per DLH) Variable overhead (20 hours @ $2.90 per DLH) Fixed overhead (20 hours @ $1.20 per DLH) Standard cost per unit $ 60.00 90.00 58.00 24.00 $ 232.00 The $4.10 ($2.90 + $1.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40,950 units, which is 65% of the factory's capacity of 63,000 units per month. The following monthly flexible budget information is available. Operating Levels (% of capacity) Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhead Variable overhead Fixed overhead Total overhead 60% 37,800 756,000 $ 2,192,400 982,800 $ 3,175,200 65% 40,950 819,000 $ 2,375,100 982,800 $ 3,357,900 70% 44,100 882,000 $ 2,557,800 982,800 $ 3,540,600 During the current month, the company operated at 60% of capacity, direct labor of 726,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead Actual fixed overhead Actual total overhead $ 2,120,000 1,065,000 $ 3,185,000 AH = Actual Hours SH Standard Hours AVR = Actual Variable Rate SVR Standard Variable Rate 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances. 3. Compute the controllable variance.
Required information [The following information applies to the questions displayed below.] Sedona Company set the following standard costs for one unit of its product for this year. Direct material (30 pounds @ $2.00 per pound) Direct labor (20 hours @ $4.50 per DLH) Variable overhead (20 hours @ $2.90 per DLH) Fixed overhead (20 hours @ $1.20 per DLH) Standard cost per unit $ 60.00 90.00 58.00 24.00 $ 232.00 The $4.10 ($2.90 + $1.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40,950 units, which is 65% of the factory's capacity of 63,000 units per month. The following monthly flexible budget information is available. Operating Levels (% of capacity) Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhead Variable overhead Fixed overhead Total overhead 60% 37,800 756,000 $ 2,192,400 982,800 $ 3,175,200 65% 40,950 819,000 $ 2,375,100 982,800 $ 3,357,900 70% 44,100 882,000 $ 2,557,800 982,800 $ 3,540,600 During the current month, the company operated at 60% of capacity, direct labor of 726,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead Actual fixed overhead Actual total overhead $ 2,120,000 1,065,000 $ 3,185,000 AH = Actual Hours SH Standard Hours AVR = Actual Variable Rate SVR Standard Variable Rate 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances. 3. Compute the controllable variance.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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![Required information
[The following information applies to the questions displayed below.]
Sedona Company set the following standard costs for one unit of its product for this year.
Direct material (30 pounds @ $2.00 per pound)
Direct labor (20 hours @ $4.50 per DLH)
Variable overhead (20 hours @ $2.90 per DLH)
Fixed overhead (20 hours @ $1.20 per DLH)
Standard cost per unit
$ 60.00
90.00
58.00
24.00
$ 232.00
The $4.10 ($2.90 + $1.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40,950
units, which is 65% of the factory's capacity of 63,000 units per month. The following monthly flexible budget information
is available.
Operating Levels (% of capacity)
Flexible Budget
Budgeted production (units)
Budgeted direct labor (standard hours)
Budgeted overhead
Variable overhead
Fixed overhead
Total overhead
60%
37,800
756,000
$ 2,192,400
982,800
$ 3,175,200
65%
40,950
819,000
$ 2,375,100
982,800
$ 3,357,900
70%
44,100
882,000
$ 2,557,800
982,800
$ 3,540,600
During the current month, the company operated at 60% of capacity, direct labor of 726,000 hours were used, and the
following actual overhead costs were incurred.
Actual variable overhead
Actual fixed overhead
Actual total overhead
$ 2,120,000
1,065,000
$ 3,185,000
AH = Actual Hours
SH
Standard Hours
AVR = Actual Variable Rate
SVR
Standard Variable Rate
1. Compute the variable overhead spending and efficiency variances.
2. Compute the fixed overhead spending and volume variances.
3. Compute the controllable variance.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc77d7178-c90f-4834-94a3-4cdcfd18490d%2F54cc8ec9-d7f4-43c0-b65f-ad5fedb3782e%2Fxgteowi_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Sedona Company set the following standard costs for one unit of its product for this year.
Direct material (30 pounds @ $2.00 per pound)
Direct labor (20 hours @ $4.50 per DLH)
Variable overhead (20 hours @ $2.90 per DLH)
Fixed overhead (20 hours @ $1.20 per DLH)
Standard cost per unit
$ 60.00
90.00
58.00
24.00
$ 232.00
The $4.10 ($2.90 + $1.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40,950
units, which is 65% of the factory's capacity of 63,000 units per month. The following monthly flexible budget information
is available.
Operating Levels (% of capacity)
Flexible Budget
Budgeted production (units)
Budgeted direct labor (standard hours)
Budgeted overhead
Variable overhead
Fixed overhead
Total overhead
60%
37,800
756,000
$ 2,192,400
982,800
$ 3,175,200
65%
40,950
819,000
$ 2,375,100
982,800
$ 3,357,900
70%
44,100
882,000
$ 2,557,800
982,800
$ 3,540,600
During the current month, the company operated at 60% of capacity, direct labor of 726,000 hours were used, and the
following actual overhead costs were incurred.
Actual variable overhead
Actual fixed overhead
Actual total overhead
$ 2,120,000
1,065,000
$ 3,185,000
AH = Actual Hours
SH
Standard Hours
AVR = Actual Variable Rate
SVR
Standard Variable Rate
1. Compute the variable overhead spending and efficiency variances.
2. Compute the fixed overhead spending and volume variances.
3. Compute the controllable variance.
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