Ripley, Inc., costs products using a normal costing system. The following data are available for last year: Budgeted: Overhead $305,200 Machine hours 81,000 Direct labor hours 10,900 Actual: Overhead $304,800 Machine hours 79,400 Direct labor hours 10,690 Prime cost $1,500,680 Number of units 180,000 Overhead is applied on the basis of direct labor hours. Required: 1. What was the predetermined overhead rate? $fill in the blank 1 per direct labor hour 2. What was the applied overhead for last year? $fill in the blank 2 3. Was overhead over- or underapplied, and by how much? = $fill in the blank 4 4. What was the total cost per unit produced? (Carry your answer to four significant digits.) $fill in the blank 5 per unit
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.
Ripley, Inc., costs products using a normal costing system. The following data are available for last year:
| Budgeted: | ||
| |
$305,200 | |
| Machine hours | 81,000 | |
| Direct labor hours | 10,900 | |
| Actual: | ||
| Overhead | $304,800 | |
| Machine hours | 79,400 | |
| Direct labor hours | 10,690 | |
| Prime cost | $1,500,680 | |
| Number of units | 180,000 |
Overhead is applied on the basis of direct labor hours.
Required:
1. What was the predetermined overhead rate?
$fill in the blank 1 per direct labor hour
2. What was the applied overhead for last year?
$fill in the blank 2
3. Was overhead over- or underapplied, and by how much?
= $fill in the blank 4
4. What was the total cost per unit produced? (Carry your answer to four significant digits.)
$fill in the blank 5 per unit
Trending now
This is a popular solution!
Step by step
Solved in 6 steps with 5 images
