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21 Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basisRequirea: 1. Compute the predetermined overhead rate for the year. Break the rate down into variable and fixed elements. 2. P

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Answer #1
1)
predetermined overhead rate 11.6
variable rate 3.8
fixed rate (1,287,000/165000) 7.8
2)
Direct materials 4 pounds at 7.5 per pound 30
Direct labor 1.5 DLH'S 12.9 per DLH 19.35
Variable overhead 1.5 DLH'S at 3.8 per DLH 5.7
Fixed overhead 1.5 DLH'Sat 7.8 per DLH 11.7
Standard cost per unit 66.75
3)
Standard direct labor hours allowed for the years production=
Actual units produced *Direct labor hr per unit
132000*1.5
198000
3b)
Manufacturing overhead T-Account
Actual costs 1813350 Applied costs (198000*11.6) 2296800
overhead overapplied 483450
4)
Variable overhead rate variance = (AR- Std rate)*AH
                                                           =(493350 -214500*3.8)
321750 F
Variable overhead efficiency variance = (AH-SH)*SR
                                                                     = (214,500-198000)*3.8
62700 U
Fixed overhead budget variance = actual overhead - budgeted oveerhead
1,320,000-1,287,000
33000 U
fixed overhead volume variance= actual output*fixed overhead rate per unit-budgeted overhead
132000*11.7-1,287,000
257,400 F
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