Part-1 |
Predetermined Overhead rate = $2.20 + $6.20 = $8.40 per DLH |
Variable overhead rate = $2.20 per DLH |
Fixed overhead rate = $279000/ 45000= $6.20 per DLH |
2) Standard Cost Card : | |||||
Direct Mateial | 4 | Pounds at | $3.50 | Per pound | $14.00 |
Direct Labour | 1.5 | DLHs at | $12.10 | per DLH | $18.15 |
Variable Overhead | 1.5 | DLHs at | $2.20 | per DLH | $3.30 |
Fixed Overhead | 1.5 | DLHs at | $6.20 | per DLH | $9.30 |
Standard cost per unit | $44.75 |
3a) Standard DLH allowed for the year = 30000 units * 1.5 DLH per unit = 45000 DLH |
3b) Manufacturing Overhead : | |||
Variable cost | $87,750.00 | WIP (45000*8.40) | $378,000.00 |
Fixed cost | $321,750.00 | Underapplied Overhead | $31,500.00 |
Total | $409,500.00 | Total | $378,000.00 |
Variable OH Rate Variance= ( SR-AR)X AH |
($2.20-$1.5)X58500=$40950 Favourable |
Actual Rate= 87750/58500=$1.5 |
Variable OH Efficiency Variance= ( SHX AQ-Ahour)X SR |
(1.5 Hour X 30000-58500)X$2.20= $29700 Unfavourable |
-1 |
Fixed verhead Budget Variance= Budgeted Oh- Actual Overhead |
$279000-$321750=$42750Unfavourable |
Fixed Overhead Volume Variance= Applied Overhead - Actual Overhead |
(1.5 HourX30000X$6.20)-$321750=$42750 Un Favourable |
Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost...
Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. The budgeted variable manufacturing overhead is $2.20 per direct labor-hour and the budgeted fixed Emanufacturing overhead is $279,000 per year. The standard quantity of materials is 4 pounds per unit and the standard cost is $3.50 per pound. The standard direct labor-hours per unit is 1.5 hours and the standard labor rate is $12.10 per...
Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. The budgeted variable manufacturing overhead is $2.20 per direct labor-hour and the budgeted fixed manufacturing overhead is $279,000 per year. The standard quantity of materials is 4 pounds per unit and the standard cost is $3.50 per pound. The standard direct labor-hours per unit is 1.5 hours and the standard labor rate is $12.10 per...
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