INTER. ACCOUNTING - CONNECT+ALEKS ACCESS
10th Edition
ISBN: 9781264770335
Author: SPICELAND
Publisher: MCG
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I.
Prepare a flexible budget for overhead based on the following data:
Percent of capacity
90%
100%
110%
Direct labor hours
3,600
4,000
4,400
Units of output
900
1,000
1,100
Variable overhead
Fixed overhead
$3,600
$ 4,000
$ 4,400
$6,000
$ 6,000
Total overhead
$9,600
$10,000
$ 6,000
$10,400
II.
Normal capacity = 100% and overhead is applied based on direct labor hours
Standard overhead rate = $10,000/4,000 = $2.50 per direct labor hour
Direct materials are $67.50 per unit.
Direct labor is $23.50 per hour.
Use the following standard cost card for 1 gallon of ice cream to answer the
questions.
Product: Gallon of Ice Cream
STANDARD COST CARD
Manufacturing
Standard
Cost Information
Quantity
Standard Cost
per Unit
Cost
Summary
Direct Materials
Cream
6 quarts
$1.00 per quart
$6.00
Sugar
15 ounces
$0.07 per ounce
$1.05
Direct Labor
3 minutes
$38.00 per hour
$1.90
Total Direct Costs
$8.95
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Actual direct costs incurred to make 50 gallons of ice cream:
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275 quarts of cream at…
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