Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow. V-1 Units produced Direct materials cost per unit Machine hours per unit Production runs per month V-2 1,000 2 $ 4 1 2 80 10,000 40 Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow. SAR O0e
Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow. V-1 Units produced Direct materials cost per unit Machine hours per unit Production runs per month V-2 1,000 2 $ 4 1 2 80 10,000 40 Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow. SAR O0e
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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![Exercise 9-38 and 9-39 (Algo)
Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two
products follow.
V-1
V-2
Units produced
Direct materials cost per unit
Machine hours per unit
Production runs per month
1,000
10,000
$
2
4
2
80
40
Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the
plant follow.
Machine depreciation
Setup labor
Material handling
$48,000
22,800
15,360
$86,160
Total
Required:
a. Upriver currently applies overhead on the basis of machine hours. What is the predetermined overhead rate for the month? (Round
your answer to 2 decimal places.)
b. Upriver is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine hours for machine
depreciation, production runs for setup labor, and direct material dollars for material handling. Compute the cost driver rates for the
proposed system at Upriver. (Round "Machine depreciation" answer to 2 decimal places.)
Overhead rate
b. Machine depreciation
per machine hour
per machine hour
per production run
a.
Setup labor
Material handling
% direct material cost](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3a64c187-306c-4347-a360-2f2c8feb30de%2F9e12137d-6159-4b0b-956a-f3f081b3ebf0%2Fundek5k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 9-38 and 9-39 (Algo)
Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two
products follow.
V-1
V-2
Units produced
Direct materials cost per unit
Machine hours per unit
Production runs per month
1,000
10,000
$
2
4
2
80
40
Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the
plant follow.
Machine depreciation
Setup labor
Material handling
$48,000
22,800
15,360
$86,160
Total
Required:
a. Upriver currently applies overhead on the basis of machine hours. What is the predetermined overhead rate for the month? (Round
your answer to 2 decimal places.)
b. Upriver is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine hours for machine
depreciation, production runs for setup labor, and direct material dollars for material handling. Compute the cost driver rates for the
proposed system at Upriver. (Round "Machine depreciation" answer to 2 decimal places.)
Overhead rate
b. Machine depreciation
per machine hour
per machine hour
per production run
a.
Setup labor
Material handling
% direct material cost
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