Cintron Company produces high-quality leather belts. The Boise plant uses a stan

Question

Cintron Company produces high-quality leather belts. The Boise plant uses a standard costing system with the following standards and actuals.

Direct labor is the basis for applying variable and fixed overhead.

What is the dollar amount for Variable Overhead Applied?

Standard Price Standard Usage Direct Labor (DL) $ 11 0.76 hours Variable Overhead (per DL hour) $ 7 Budgeted Production for July 33,856 Budgeted Fixed Overhead for July $ 34,668 July Data Number of Belts Produced 113,905 Number of Labor Hours Used 19,280 Actual Variable Overhead Costs    $ 554,307 Actual Fixed Overhead Costs $ 151,071

Explanation / Answer

Variable overhead applied = Standard hours allowed*standard rate per labour hour

= (113905*.76*7)

Variable overhead applied = 605974.60

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