Wymont Company produces a single product that requires a large amount of labor t
ID: 2370440 • Letter: W
Question
Wymont Company produces a single product that requires a large amount of labor time. Overhead cost is applied on the basis of standard direct labor-hours. Variable manufacturing overhead should be $2.00 per standard direct labor-hour and fixed manufacturing overhead should be $180,000 per year.
The companys product requires 4 feet of direct material that has a standard cost of $3.00 per foot. The product requires 1.5 hours of direct labor time. The standard labor rate is $12.00 per hour.
During the year, the company had planned to operate at a denominator activity level of 30,000 direct labor-hours and to produce 20,000 units of product. Actual activity and costs for the year were as follows:
Compute the predetermined overhead rate for the year. Break the rate down into variable and fixed components. (Omit the "$" sign in your response.)
Compute the standard cost card for the companys product. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Complete the following Manufacturing Overhead T-account for the year: (Omit the "$" sign in your response):
Determine the reason for the underapplied or overapplied overhead from (3) above by computing the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Wymont Company produces a single product that requires a large amount of labor time. Overhead cost is applied on the basis of standard direct labor-hours. Variable manufacturing overhead should be $2.00 per standard direct labor-hour and fixed manufacturing overhead should be $180,000 per year.
Explanation / Answer
1 Compute the predetermined overhead rate for the year. Break the rate down into variable and fixed components.(Omit the "$" sign in your response.) Predetermined overhead rate $8.00 per DLH Variable rate $2.00 per DLH Fixed rate $6.00 per DLH 2 Compute thestandard cost card for the company
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