Pick the correct answer, show work 30. Lewis Company calculates its predetermine

Question

Pick the correct answer, show work

30. Lewis Company calculates its predetermined rates using practical volume, which is 288,000 units. The standard cost system allows 2 direct labor hours per unit produced. Overhead is applied using direct labor hours. The total budgeted overhead is $3,168,000, of which $864,000 is fixed overhead. The actual results for the year are as follows:

Units produced:          280,000
Direct labor:              570,000 hours @ $9
Variable overhead:     $2,320,000
Fixed overhead:         $872,000

The predetermined fixed overhead rate is:

a. $3 per direct labor hour.
b. $1.50 per direct labor hour.
c. $5.50 per direct labor hour.
d. $4 per direct labor hour.
e. none of these.

31. The predetermined variable overhead rate is:

a. $3.00 per direct labor hour.
b. $1.50 per direct labor hour.
c. $5.50 per direct labor hour.
d. $4.00 per direct labor hour.
e. none of these.


32. Calculate the applied fixed overhead.

a. $840,000
b. $855,000
c. $864,000
d. $910,000
e. none of these

33. Calculate the fixed overhead spending variance.

a. $32,000 F
b. $0
c. $8,000 U
d. $32,000 U
e. $8,000 F

Explanation / Answer

30.Option " b" is the correct answer pre determined over head rate = Expected over head / allocation base = $864000 / 576000 hours = 1.50 [here labor hours = 288000 *2 = 576000 hours ] 31.option " d" is the correct answer. = [$3168000-$864000]/576000 = $4 32.option "C" is the correct answer here first the budgeted fixed over head would be applied , and then the mangement will decide wether it is under applied or over applied.The under /over applied cost wiil be adjusted with cost of good sold a/c. 33.option "c" is the correct answer. $864000-$872000 = $ 8000 un favourable

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.