Question

World Company expects to operate at 60% of its productive capacity of 28,000 units per month. At this planned level, the company expects to use 7,560 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 60% capacity level, the total budgeted cost includes $22,680 fixed overhead cost and $60,480 variable overhead cost. In the current month, the company incurred $63,920 actual overhead and 7,130 actual labor hours while producing 11,600 units. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.)

JALLIS U pede at 50% of its productive capacity of 28,000 units per month. At this planned level, expects to use 7,560 standard hours of direct labor. Overhead is allocated to products using a predetermined standard direct labor hour per unit. At the 60% capacity level, the total budgeted cost includes $22,680 fixed overhead cost and variable overhead cost. In the current month, the company incurred $63.920 actual overhead and 7,130 actual labor ho producing 11,600 units. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.) (1) Compute the predetermined standard overhead rate for total overhead. Predetermined OH rate Variable overhead costs Fixed overhead costs Total overhead costs (2) Compute the total overhead variance. Actual production 11,600 units - Standard DL Hours Overhead costs applied Actual results Variance Fav./Unt. Variable overhead costs Fixed overhead costs Total overhead costs

Answer 1

Seludion Require mend Predefernind HTate Vasiable ouehad ceb C $ 60, 480 /,560 stardord duct Labou hous $ &00 Fixed ouead cets $3.00 22,68o /7,560 stomdord direct Labour hours Total ouer head Certs $1-co CB&-cO+$3.c0 Paquire mort- std. DLheus o ApPlbeol Acual Aelul aiane AVA FAL Variable oua head Cets $41,760 5,226 Fixed ouer heo Cevts S,220 $5,660 Total cuahoad orts $53420 63,920 16s00 Um

Wor kingss Standatdl DL Hous 11,600 unts xo.ro DLHS= 52200LHs Vavable otapplk- 5,2208.00 -$41,760 Fixed ouer kead cets oppledl - 220 $3.0o =$ I$,600 17 FAckval alult oHoppliedl Vatan a $63, 920-$57, 420 7 6,500 Itfs unhuorable as aclual o t Ps higler-teram lamolar o H.