Multiple Choice Question 95 Information on Bonita\'s direct labor costs for the
ID: 2431118 • Letter: M
Question
Multiple Choice Question 95
Information on Bonita's direct labor costs for the month of August is as follows:
What was the standard rate for August?
Multiple Choice Question 164
Multiple Choice Question 177
The following information was taken from the annual manufacturing overhead cost budget of Swifty Corporation.
During the year, 5575 units were produced, 18240 hours were worked, and the actual manufacturing overhead was $78600. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours. Swifty's total overhead variance is
Explanation / Answer
95.
Direct labor rate Variance = (Actual rate – Standard rate) x Actual direct labor hours
$ 3,200 = ($ 6 - Standard rate) x 10,000
$ 6 - Standard rate = $ 3,200/10,000
$ 6 - Standard rate = $ 0.32
Standard rate = $ 6 - $ 0.32 = $ 5.68
Hence option “$ 5.68” is correct answer
164.
Overhead volume variance
= (Normal capacity hours – Standard hours allowed for actual production) x fixed overhead rate
= (40,000 – 45,000) x $ 4 = -5,000 x $ 4 = - $ 20,000 Favorable
Hence option “$ 20,000 favorable” is correct answer.
177.
Overhead application rate = Total budgeted overhead/Total budgeted hours
= ($ 50,600 + $ 27,600)/ 23,000 = $ 78,200/23,000 = $ 3.4
Overhead variance = Actual overhead - Overhead applied
= Actual overhead - (Overhead application rate x Standard hours)
= $ 78,600 - ($ 3.4 x 5,575 x 4)
= $ 78,600 - $ 75,820 = $ 2,780 Unfavorable
Hence option “$ 2,780 U” is correct answer.
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