Overhead application rate (similar to Self-Study Problem 2) Bama Manufacturing Inc. use...

Overhead application rate (similar to Self-Study Problem 2)

Bama Manufacturing Inc. uses a job order cost system and standard costs. It manufactures one product, whose standard cost follows:

The standards are based on normal capacity of 2,700 direct labor hours. Actual activity for March follows:

Materials purchased, 13,500 yards @ $1.55 per yard $20,925

Materials used, 13,000 yards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Direct labor, 2,620 hours @ $13.50 per hour . . . . . . . . . . . . . 35,370

Total factory overhead, 1,300 units actually produced . . . 30,500

Required:

1. Compute the variable and fixed factory overhead rates per unit.

2. Compute the variable and fixed overhead rates per direct labor hour.

3. Determine the total fixed factory overhead based on normal capacity.

Reference:

Overhead application rate, and total fixed overhead

Cronin Manufacturing Co.

Cronin Manufacturing Co. uses a job order cost system and standard costs. It manufactures one product, whose standard cost follows:

The standards are based on normal capacity of 3,600 direct labor hours. Actual activity for October follows:

Materials purchased, 20,000 yards@$1.95 per yard (Materials used, 19,500 yards). . . . $39,000

Direct labor, 3,500 hours @ $12.10 per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,215

Total factory overhead, 900 units actually produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,500

Required:

1. Compute the variable and fixed factory overhead rates per unit.

2. Compute the variable and fixed overhead rates per direct labor hour.

3. Determine the total fixed factory overhead based on normal capacity.