Sheridan Company produces one product, a putter called GO-Putter. Sheridan uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 120,000 units per year. The total budgeted overhead at normal capacity is $1,080,000 comprised of $420,000 of variable costs and $660,000 of fixed costs. Sheridan applies overhead on the basis of direct labor hours. During the current year, Sheridan produced 74,000 putters, worked 98,300 direct labor hours, and incurred variable overhead costs of $233,200 and fixed overhead costs of $462,000. (a) Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answers to 2 decimal places, e.g. 2.75.) Variable Fixed Predetermined Overhead Rate $ $ Tra Compute the applied overhead for Platt for the year. Applied Overhead Compute the total overhead variance. Identify whether the variance is favorable or unfavorable? Total Overhead Variance Show Transcribed Text
Sheridan Company produces one product, a putter called GO-Putter. Sheridan uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 120,000 units per year. The total budgeted overhead at normal capacity is $1,080,000 comprised of $420,000 of variable costs and $660,000 of fixed costs. Sheridan applies overhead on the basis of direct labor hours. During the current year, Sheridan produced 74,000 putters, worked 98,300 direct labor hours, and incurred variable overhead costs of $233,200 and fixed overhead costs of $462,000. (a) Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answers to 2 decimal places, e.g. 2.75.) Variable Fixed Predetermined Overhead Rate $ $ Tra Compute the applied overhead for Platt for the year. Applied Overhead Compute the total overhead variance. Identify whether the variance is favorable or unfavorable? Total Overhead Variance Show Transcribed Text
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...
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