The following data is provided for Hampshire Enterprises: Service Depts. Production Depts. One Two A B Overhead costs before allocation $60,000 $80,000 $30,000 $25,000 Proportions of service by One --- 30% 50% 20% Proportions of service by Two 10% --- 60% 30% Direct labor hours worked 6,000 5,000 Use the reciprocal method and determine overhead rates for: Production Dept. A: $ _____________ per direct labor hr. Production Dept. B: $ _____________ per direct labor hr.
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 data is provided for Hampshire Enterprises:
Service Depts. Production Depts.
One Two A B
Proportions of service by One --- 30% 50% 20%
Proportions of service by Two 10% --- 60% 30%
Direct labor hours worked 6,000 5,000
Use the reciprocal method and determine overhead rates for:
Production Dept. A: $ _____________ per direct labor hr.
Production Dept. B: $ _____________ per direct labor hr.
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