Part-1 |
Predetermined Overhead rate = $3.80 + $7.80 = $11.60 per DLH |
Variable overhead rate = $3.80 per DLH |
Fixed overhead rate = $1287000/ 165000= $7.80 per DLH |
2) Standard Cost Card : | |||||
Direct Mateial | 4 | Pounds at | $7.50 | Per pound | $30.00 |
Direct Labour | 1.5 | DLHs at | $12.90 | per DLH | $19.35 |
Variable Overhead | 1.5 | DLHs at | $3.80 | per DLH | $5.70 |
Fixed Overhead | 1.5 | DLHs at | $7.80 | per DLH | $11.70 |
Standard cost per unit | $66.75 |
3a) Standard DLH allowed for the year = 132000 units * 1.5 DLH per unit = 198000 DLH |
3b) Manufacturing Overhead : | |||
Variable cost | $493,350.00 | WIP (198000*11.60) | $2,296,800.00 |
Fixed cost | $1,320,000.00 | ||
Over-applied (BF) | $483,450.00 | ||
Total | $2,296,800.00 | Total | $2,296,800.00 |
Variable OH Rate Variance= ( SR-AR)X AH |
($3.80-$2.30)X214500=$321750 Favourable |
Actual Rate= 493350/214500=$2.30 |
Variable OH Efficiency Variance= ( SHX AQ-Ahour)X SR |
(1.5 Hour X 132000-214500)X$3.80= $62700 Unfavourable |
-1 |
Fixed verhead Budget Variance= Budgeted Oh- Actual Overhead |
$1287000-$1320000=$33000 Unfavourable |
Fixed Overhead Volume Variance= Applied Overhead - Actual Overhead |
(1.5 HourX132000X$7.80)-$1320000=$224400 Favourable |
21 Lane Company manufactures a single product that requires a great deal of hand labor. Overhead...
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