The following budget data are available for Oldest Company: Estimated direct labor hours 12,000 Estimated direct labor dollars $90,000 Estimated factory overhead costs $198,000 If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is: A. $7.50 B. $.13 C. $.061 D. $16.50
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.
The following budget data are available for Oldest Company:
Estimated direct labor hours 12,000
Estimated direct labor dollars $90,000
Estimated
If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is:
A. $7.50
B. $.13
C. $.061
D. $16.50
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
