Solution 1:
Fixed overhead applied | ||
Fixed overhead per DL hr | $2.30 | |
Standard DL hr | 23850 | |
Fixed overhead applied | $54,855.00 | |
Volume Variance | ||
Total Budgeted Fixed overhead | $57,960.00 | |
Total fixed overhead applied | $54,855.00 | |
Volume Variance | $3,105.00 | Unfavorable |
Solution 2:
Controllable Variance | |||
Total actual overhead | $386,000.00 | ||
Flexible Budget Overhead | |||
Fixed | $57,960.00 | ||
Variable | $305,280.00 | ||
Total | $363,240.00 | ||
Overhead controllable variance | $22,760.00 | Unfavorable |
World Company expects to operate at 80% of its productive capacity of 70,000 units per month....
World Company expects to operate at 80% of its productive capacity of 70,000 units per month. At this planned level, the company expects to use 25,200 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.450 direct labor hour per unit. At the 80% capacity level, the total budgeted cost includes $57,960 fixed overhead cost and $322.560 variable overhead cost. In the current month, the company incurred $386,000 actual overhead and 22,200 actual...
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World Company expects to operate at 70% of its productive capacity of 20,000 units per month. At this planned level, the company expects to use 11,550 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.825 direct labor hour per unit. At the 70% capacity level, the total budgeted cost includes $23,100 fixed overhead cost and $138,600 variable overhead cost. In the current month, the company incurred $135,860 actual overhead and 7180 actual...
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