eternal Links-20181-14685 true&returnUrl;:https%3A%2F%2F, a Search HW Chapter 21
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eternal Links-20181-14685 true&returnUrl;:https%3A%2F%2F, a Search HW Chapter 21 5 Sedona Company set the following standard costs for one unit of its product for 2017 Direet naterial (20 Ibs $2.50 per Ib. Direet 1abor 110 hrs. $22.00 per hr. Factory variable overhead (10 hre. $4.00 per he.) Factory tixed overhead (10 hrs. $1.60 per hr.) Standard coat 50.00 220.00 40.00 16.00 5326.00 The $560 ($400-$160, total overhead rate per direct labor hour is based on an expected operating level equal to 75% of the factory's capacity of 50,000 units per month. The following monthly flexible budget information is also available. 400, 000 Budgeted labor (standard hours) Budgeted overhead (dollars) 350,000 $1, 400,000 $2, 000, 000 375,000 $1,500,000 600,000 1, 600,000 600, 000 $2,100, 000 2,200,000 During the current month, the company operated at 70% of capacity employees worked 340,000 hours, and the following actual overhead costs were incurred AH Actual Hours Type here toExplanation / Answer
Answer 1. Predetermined Overhead Rate at 75% Capacity Total Total Labor Hours Predetermined Overhead Rate per Lab. Hr Variable Overhead Cost 1,500,000 375,000 4.00 Fixed Overhead Cost 600,000 375,000 1.60 Total Overhead Cost 2,100,000 375,000 5.60 Answer 2. At 70% of Operating Capacity Predermined Overhead Rate Standard Direct Lab. Hr. Overhead Cost applied Actual Results Variance Variable Overhead Cost 4.00 350,000 1,400,000 1,375,000 25,000 F Fixed Overhead Cost 1.60 350,000 560,000 628,600 68,600 U Total Overhead Cost 5.60 350,000 1,960,000 2,003,600 43,600 U
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