Required 1:-
Predetermined overhead rate | $14.00 | per DLH |
Variable rate | $5.00 | per DLH |
Fixed rate | $9.00 | per DLH |
Working:-
Fixed rate:- budgeted fixed overhead/Estimated direct labour hour
= 2295000/255000 = 9.00
Predetermined overhead rate = 5.00+9.00 = 14.00
Required 2:-
Direct material | 4 | pounds at | 10.50 | per pound | $42.00 |
Direct labour | 1.5 | DLHs at | 13.50 | per DLH | $20.25 |
VaroaVar overhead | 1.5 | DLHs at | 5.00 | per DLH | $7.50 |
Fixed overhead | 1.5 | DLHs at | 9.00 | per DLH | $13.50 |
Total = $83.25
Required 3a:-
Standard direct labour hour required for actual production = 204000units * 1.5 hrs. = 306000 units
Required 3b :-
Manufacturing overhead
Actual cost | 3613350 | WIP (306000*14.00) | 4284000 |
Overapplied oberhove | 670650 | ||
Required 4:-
Variable overhead variance | $696150 | F |
Variable overhead efficiency variance | $127500 | U |
Fixed overhead budgeted variance | $357000 | U |
Fixed overhead volume variance | $459000 | F |
Working:-
a. Variable overhead variance :- (AR-SR)*AH
= (5.00-2.9)*331500 = 696150
b. Variable overhead efficiency variance = (SH-AH)*SR
= (306000-331500)*5.00 = 127500
c. Fixed overhead budgeted variance =
Budgeted overhead - Actual overhead
2295000-2652000 = 357000
d.Fixed overhead volume variance =
Overhead applied - budgeted overhead
(306000*9.00)- 2295000 = 459000
SR | standard rate |
AR | actual rate |
SH | standard hour |
AH | actual hour |
Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost...
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