Question

xyz manufacturing

Question 5 (1 point) XYZ Manufacturing uses a standard cost system with overhead applied based on direct-labor hours. The manufacturing budget for the production of 5,000 units for the month of June included 10,000 hours of direct labor at $20 per hour, or $200,000. During June, 4,500 units were produced, using 9,600 direct-labor hours, incurring $43,400 of variable overhead, and showing a variable overhead efficiency variance of $3,600 unfavorable. The standard variable overhead rate per direct-labor hour was 1) $5.85 2) $6.00 3) $6.20 4) $0 Previous Page Next Page Page 1 of 10

Answer 1

Ans. 5	Option 2) $6.00
	*WORKING NOTES :
	*Calculations for standard hours :
	Standard hours = Budgeted hours / Budgeted production * Actual production
	10,000 / 5,000 * 4,500
	9,000 hours
	*Calculations for standard variable overhead rate :
	Variable overhead efficiency variance = (Standard hours - Actual hours) * Standard variable overhead rate
	-$3,600 = (9,000 - 9,600) * Standard variable overhead rate
	-$3,600 = -600 * Standard variable overhead rate
	-$3,600 / -600 = Standard variable overhead rate
	Standard variable overhead rate = $6.00 per hour
Ans. 6	Product cost	$656,000
	Period cost	$465,300
	*WORKING NOTES :
	*Calculations for Product cost :
	Particulars	Amount
	Direct materials used	$56,000
	Direct labor	$179,000
	Variable manufacturing overhead	$154,000
	Fixed manufacturing overhead	$267,000
	Total product cost	$656,000
	*Calculations for Period cost :
	Particulars	Amount
	Variable selling costs	$108,400
	Fixed selling costs	$121,000
	Fixed administrative costs	$235,900
	Total period cost	$465,300