Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year's delivery operations: Deliveries made 38,600 Direct labor 31,000 direct labor hours @ $14.00 Actual variable $157,700 overhead Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery. Assume that the actual fixed overhead was $403,400. Budgeted fixed overhead was $400,000, based on practical capacity of 32,000 direct labor hours. Required: 1. Calculate the standard fixed overhead rate based on budgeted fixed overhead and practical capacity.
Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year's delivery operations: Deliveries made 38,600 Direct labor 31,000 direct labor hours @ $14.00 Actual variable $157,700 overhead Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery. Assume that the actual fixed overhead was $403,400. Budgeted fixed overhead was $400,000, based on practical capacity of 32,000 direct labor hours. Required: 1. Calculate the standard fixed overhead rate based on budgeted fixed overhead and practical capacity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has
invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered
the following actual data on last year's delivery operations:
Deliveries made
38,600
Direct labor
31,000 direct labor hours @ $14.00
Actual variable
$157,700
overhead
Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used.
The labor standard requires 0.80 hour per delivery.
Assume that the actual fixed overhead was $403,400. Budgeted fixed overhead was $400,000, based on practical
capacity of 32,000 direct labor hours.
Required:
1. Calculate the standard fixed overhead rate based on budgeted fixed overhead and practical capacity.
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