Company uses a lexible budget end standand costs to aid planning and conterol of

Question

Company uses a lexible budget end standand costs to aid planning and conterol of its machining mandfacturing operations. ts cosating systom for manufacturing has two direcd-cost categories (direct materials The Gale olowing actual nesults are for August Some aditional information about Gallo Company's budget, standand costs and labor follows und amed ran feala de alegorins (ariable manufacthring overheed and foued manufactaring overhead, both alooated using direct muacring labor-hourn) The EE (Click the loon to view the results) Click the icon to view addtional information)

Explanation / Answer

Calcualtion Budgetded variable maufacturing overhead/Budgeted labor hours 440000/40000 11 Variable manufacturing overhead efficiency variance=18700 excess hours taken=18700/11 1700 hours Actual hours-Std hours 23000-std hours=1700 Std hours=23000-1700 21300 Calculation of actual hours Budgeted direct labor rate 800000/40000 20 Actual rate 20+.5 20.5 Actual hours=471500/20.5 23000 ans Actual hours - excess hours std hours allowed 23000 1700 21300 If any doubt please comment

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