Sedona Company set the following standard costs for one unit of its product for this year Direct terial (15 pounds 53.40 per pound) Direct labor (1e hourss9.70 per DLH) Veriable overhead (10 hours e $4.90 per DLH) Fised overhead (10 hours $2.00 per DLH) Standard cost per unit $$1.00 97,00 49.00 20.00 $ 217.00 The $6.90 ($4.90 $2.00) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 41,300 units, which is 70% of the factory's capacity of 59.000 units per month. The following monthly flexible budget information Is avallable. Operat ing levels (K of capacity) 70 41, 00 41), 00 lexible Budget Budgeted production (units) udgeted direct labor (standard hours) Budgsted everhead Variable overhead Fised overhead Total evertead 30, 5e 363,500 75 44,250 442, 500 $ 1,879,150 826, 000 $2,705,150 $ 2,023, 700 826, 000 $2,49, 700 $2,168,250 126, 00 $2,994,25e During the current month, the company operated at 65% of capacity, direct labor of 365,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead Actual fiad overhead Actuel total verhead $1,816,000 899,050 52,715,ese
Sedona Company set the following standard costs for one unit of its product for this year Direct terial (15 pounds 53.40 per pound) Direct labor (1e hourss9.70 per DLH) Veriable overhead (10 hours e $4.90 per DLH) Fised overhead (10 hours $2.00 per DLH) Standard cost per unit $$1.00 97,00 49.00 20.00 $ 217.00 The $6.90 ($4.90 $2.00) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 41,300 units, which is 70% of the factory's capacity of 59.000 units per month. The following monthly flexible budget information Is avallable. Operat ing levels (K of capacity) 70 41, 00 41), 00 lexible Budget Budgeted production (units) udgeted direct labor (standard hours) Budgsted everhead Variable overhead Fised overhead Total evertead 30, 5e 363,500 75 44,250 442, 500 $ 1,879,150 826, 000 $2,705,150 $ 2,023, 700 826, 000 $2,49, 700 $2,168,250 126, 00 $2,994,25e During the current month, the company operated at 65% of capacity, direct labor of 365,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead Actual fiad overhead Actuel total verhead $1,816,000 899,050 52,715,ese
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
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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![1. Compute the total varlable overhead varlance and identify It as favorable or unfavorable. (Indicate the effect of the variance by
selecting favorable, unfavoreble, or no varinnce.)
2. Compute the total fixed overhead varlance and identify it as favorable or unfavorable. (Indicate the effect of the variance by
selecting favorable, unfavorable, or no variance.)
At 66% of Operating Capacity-
standard Direct Labor Hours Overhead Rate
Standard
Direct Labor
Favorable/Unfavorable
Standard
Overhead Applied
Actual
Overhead
Hours
Overhead
Variance
Variable overhead variance
Fixed overhead variance
4 90
2.00
699.050](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F06485a1e-133d-4c3c-bb98-7255c1ebbbed%2Ff1de9b4a-f5bc-4f50-9f67-6bca45203607%2Fj6rjx3_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. Compute the total varlable overhead varlance and identify It as favorable or unfavorable. (Indicate the effect of the variance by
selecting favorable, unfavoreble, or no varinnce.)
2. Compute the total fixed overhead varlance and identify it as favorable or unfavorable. (Indicate the effect of the variance by
selecting favorable, unfavorable, or no variance.)
At 66% of Operating Capacity-
standard Direct Labor Hours Overhead Rate
Standard
Direct Labor
Favorable/Unfavorable
Standard
Overhead Applied
Actual
Overhead
Hours
Overhead
Variance
Variable overhead variance
Fixed overhead variance
4 90
2.00
699.050
![Sedona Company set the following standard costs for one unit of its product for this year.
Direct material (15 pounds $3.40 per pound)
Direct labor (10 hours e S9.70 per DLH)
Veriable overhead (10 hours $4.90 per DLH)
Fied overhead (10 hours $2. 00 per DLH)
Standard cost per unit
$ 51.00
97.00
49.00
20.00
$ 217.00
The $6.90 ($4.90 - $2.00) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 41,300
units, which is 70% of the factory's capacity of 59,000 units per month. The following monthly flexible budget information
Is avallable.
Operat ing Levels (K of capacity)
65%
30, 350
383,500
Flexible Budget
Budgeted production (units)
Rudgeted direct labor (standard hours)
Budgeted overhead
Varlable overhead
Fised overhead
Total avertead
41, 300
413,000
75%
44, 250
442, 500
$1,879,150
826,000
$ 2,023, 700
826, 000
$ 2,849, 700
$2,168, 250
126, e00
$ 2,994, 250
$ 2,705, 150
During the current month, the company operated at 65% of capacity, direct labor of 365,000 hours were used, and the
following actual overhead costs were incurred.
Actual varlable overhead
Actual fised overhead
Actuel total overhead
$1,16, 000
899,050
$ 2,715,05e](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F06485a1e-133d-4c3c-bb98-7255c1ebbbed%2Ff1de9b4a-f5bc-4f50-9f67-6bca45203607%2Fq40a6sl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Sedona Company set the following standard costs for one unit of its product for this year.
Direct material (15 pounds $3.40 per pound)
Direct labor (10 hours e S9.70 per DLH)
Veriable overhead (10 hours $4.90 per DLH)
Fied overhead (10 hours $2. 00 per DLH)
Standard cost per unit
$ 51.00
97.00
49.00
20.00
$ 217.00
The $6.90 ($4.90 - $2.00) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 41,300
units, which is 70% of the factory's capacity of 59,000 units per month. The following monthly flexible budget information
Is avallable.
Operat ing Levels (K of capacity)
65%
30, 350
383,500
Flexible Budget
Budgeted production (units)
Rudgeted direct labor (standard hours)
Budgeted overhead
Varlable overhead
Fised overhead
Total avertead
41, 300
413,000
75%
44, 250
442, 500
$1,879,150
826,000
$ 2,023, 700
826, 000
$ 2,849, 700
$2,168, 250
126, e00
$ 2,994, 250
$ 2,705, 150
During the current month, the company operated at 65% of capacity, direct labor of 365,000 hours were used, and the
following actual overhead costs were incurred.
Actual varlable overhead
Actual fised overhead
Actuel total overhead
$1,16, 000
899,050
$ 2,715,05e
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