Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials Indirect labor Utilities P 1.00 per DLH 1.25 per DLH 0.50 per DLH 50 000 Insurance Depreciation 400.000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs p 87.000 Fixed overhead costs 423.000 Direct labor hours 26,000 Question 1: The entry pertaining to the volume variance if the standard direct labor hours allowed for this month was 24,000 will include a debit/(credit) to manufacturing overhead amounting to? (USE NEGATIVE SIGN IF CREDIT). Question 2: How much is the variable spending variance if 17,500 units were produced? Question 3: If 13,000 units were produced during the month. How much overhead costs were debited to the Work-in-Process Inventory?

FINANCIAL ACCOUNTING
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Author:Libby
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Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials Indirect labor Utilities P 1.00 per DLH 1.25 per DLH 0.50 per DLH 50 000 Insurance Depreciation 400.000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs p 87.000 Fixed overhead costs 423.000 Direct labor hours 26,000 Question 1: The entry pertaining to the volume variance if the standard direct labor hours allowed for this month was 24,000 will include a debit/(credit) to manufacturing overhead amounting to? (USE NEGATIVE SIGN IF CREDIT). Question 2: How much is the variable spending variance if 17,500 units were produced? Question 3: If 13,000 units were produced during the month. How much overhead costs were debited to the Work-in-Process Inventory?
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