s Cerone Corporation allocates manufacturing overhead to products on the basis o
ID: 2536043 • Letter: S
Question
s Cerone Corporation allocates manufacturing overhead to products on the basis of standard machine-hours. The company bases ts predetermined overhead rate on 2,300 machine-hours. The company's total budgeted fixed manufacturing overhead is $5,060. In the most recent month, the total actual fixed manufacturing overhead was $4,660. The company actually worked 2,200 machine- hours during the month. The standard hours allowed for the actual output of the month totaled 2,320 machine-hours. What was the fixed overhead production volume variance for the month? a. $220 unfavorable b. $400 favorable c. $44 favorable d. $220 favorable When the actual price paid on credit for a raw material is less than its standard price, the journal entry would include: A) Credit to Materials Control; Credit to Materials Price Variance B) Credit to Accounts Payable, Credit to Materials Price Variance C) Credit to Materials Control; Debit to Materials Price Variance D) Credit to Accounts Payable; Debit to Materials Price Variance ina methods would the term contribution margin appear?Explanation / Answer
5)Fixed Component of Predetermined base = Estimated total fixed manufacturing overhead cost/Estimated total amount of allocation base
= $5060/2300
= $2.2 per machine hour
Volume Variance = Budgeted Fixed overhead cost - Fixed overhead applied to work in process
= ($5060-(2320*2.2))
= $5060-$5104
=$44 Favorable
Option C is correct.
6)
The option B is correct.
If the actual cost is less than the standard cost, the variance is favorable. In the given case, the actual price paid on credit of raw materials is less than its standard price, this price variance is favorable, as the actual costs have declined.
Hence credit will be given to Materials Price Variance.
Since the purchases are on credit, Accounts payable will also be credited.
Hence option B is correct.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.