J, uumpute une vanaue uver re au spenulny anu e?cency variances anu une lixeu uv
ID: 2402714 • Letter: J
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J, uumpute une vanaue uver re au spenulny anu e?cency variances anu une lixeu uverneeu budget and volume variances. EXERCISE 10-14 Using Fixed Overhead Variances [LO5, LO6 The standard cost card for the single product manufactured by Princess Company is given below: Standard Cost Card-Per Unit Direct materials, 21 metres at $6 per metre.... .. $260 1620 540 $3645 Fxed overhead, 016 direct labourhours at $9 per direct labour-hour... Last year, the company produced 7,500 units of product and worked 6,150 actual direct labour-hours. Manufacturing overhead cost is applied to production on the basis of direct labour-hours. Selected data relating to the company's fixed manufacturing overhead cost for the year are shown below: Fued Overhead Cost Actual Fued Overhead Cost $38760 Budgeted Fued Overhead Cost Applied to Work in Process ? hours x $9 per hour s? olume variance. $2250 F Required 1. What were the standard hours allowed for the year's production? 2. What was the amount of budgeted fixed overhead cost for the year? 3. What was the budget variance for the year? 4. What denominator activity level did the company use in setting the predetermined overhead rate for the year? EXERCISE 10-15 Fixed Overhead Variances [LO5, LO6)Explanation / Answer
Actual fixed overhead Budgeted Fixed overhead Fixed overhead cost applied $38,760 38250 4500 hoursX$9 40500 (40500-2250) Budget variance $510 U Volume variance 2250 F (38760-38250) No. of hours 7500*.6 4500 Ans 1 Stnadrd hours allowed 4500 hours No. of hours 7500*.6 4500 ans 2 Budgeted fixed overhead (40500-2250) 38250 (from above calculation) ans 3 Budget variance $510 U ans 4 the activity level is 38250/9 4250 hours If any doubt please comment
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