Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead o
ID: 2430783 • Letter: L
Question
Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct labor hours. Information from LLL’s standard cost card follows:
During August, LLL had the following actual results:
Lamp Light Limited (LLL) calculates a fixed overhead rate based on budgeted fixed overhead of $60,300 and budgeted production of 20,100 units. Actual results were as follows:
a. Calculate the fixed overhead rate based on budgeted production for LLL.
b.Calculate the fixed overhead spending variance for LLL.
c.Calculate the fixed overhead volume variance for LLL.
d. Calculate the over- or underapplied fixed overhead for LLL.
Standard Quantity Standard Rate Standard Unit Cost Variable manufacturing overhead 0.6 $0.80 $0.48Explanation / Answer
a. The fixed overhead rate = Budgeted fixed overhead / budgeted production = $60300 / 20100 units = $3 per unit b. fixed overhead spending variance = Actual fixed overhead = budgeted fixed overhead = $58300 - $60300 = $2000 F c. fixed overhead volume variance = Actual production at budgeted rate - budgeted fixed overhead 22100 * 3 - 60300 = 66300 - 60300 = $6000 U d. the over- or underapplied fixed overhead = Applied fixed overhead - Actual fixed overhead = 22100 * 3 - 58300 = 66300 - 58300 = $8000 over-applied
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.