Financial accounting Westfield Distribution handles order fulfillment for several online retailers. Whena customer places an order on a client's website, the order is sent to Westfield,which picks, packs, and ships the items. Westfield uses a predetermined variableoverhead rate based on direct labor hours. According to company standards, eachitem requires 0.05 direct labor hours to process, and the variable overhead rate is$7.25 per direct labor hour.In August, Westfield shipped 125,000 items using 5,900 direct labor hours. Thecompany incurred total variable overhead costs of $42,780. Calculate the variableoverhead efficiency variance for August.

Step 1: Define Variable Overhead Efficiency VarianceThe Variable Overhead Efficiency Variance…

Answered: Westfield Distribution handles order…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 33P: Big Mikes, a large hardware store, has gathered data on its overhead activities and associated costs...

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Logistics Solutions provides order fulfillment services for dot-com merchants. The company maintainswarehouses that stock items carried by its dot-com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and shipsit to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.In the most recent month, 120,000 items were shipped to customers using 2,300 direct labor-hours.The company incurred a total of $7,360 in variable overhead costs.According to the company’s standards, 0.02 direct labor-hours are required to fulfill an order for oneitem and the variable overhead rate is $3.25 per direct labor-hour.Required:1. What variable overhead cost should have been incurred to fill the orders for the 120,000 items? Howmuch does this differ from the actual variable overhead cost?2. Break down the difference computed in (1) above into a variable overhead rate…
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Help ogistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items arried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which oulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 110,000 items were shipped to customers using 3,500 direct labor-hours. The company incurred a total of $9,450 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.75 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 110,000 items to customers? 2. What is the standard variable overhead cost allowed (SH × SR) to ship 110,000 items to customers? 3. What is the variable overhead spending…
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Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 180,000 items were shipped to customers using 7.700 direct labor-hours. The company incurred a total of $26,180 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.45 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 180,000 items to customers? 2. What is the standard variable overhead cost allowed (SHSR) to ship 180,000 items to customers? 3. What is the variable overhead spending variance?…
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