M ch 10 Homework | ezto.mheducation.com/hm.tpx 16 value 0.58 points Logistics So
ID: 2490778 • Letter: M
Question
M ch 10 Homework | ezto.mheducation.com/hm.tpx 16 value 0.58 points Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor- hours In the most recent month, 130,000 items were shipped to customers using 4,700 direct labor-hours. The company incurred a total of $13,630 in variable overhead costs According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.95 per direct labor-hour. Required: 1. According to the standards, what variable overhead cost should have been incurred to fill the orders for the 130,000 items? How much does this differ from the actual variable overhead cost? (Round labor- hours per item and overhead cost per hour to 2 decimal places.) Number of items shipped Standard direct labor-hours per item 1:57 AM 5/23/2016 Search the web and WindowsExplanation / Answer
1) Number of items shipped 130000 std DL hrs per item 0.03 total Dlhrs allowed 3900 Std variable overhead cost per unit 2.95 total std variable ohs cost 11505 actual variable ovhs cost 13630 total variable ohs variance 2125 unfavourable VOH Efficiency Variance = ( SH AH ) × SR Where, SH are standard direct labor hours allowed AH are the actual direct labor hours SR is the standard variable overhead rate =(3900-4700)*2.95 (2,360.00) VOH Spending Variance = ( SR × AU ) Actual Variable Overhead Cost =(130000*.03*2.95)-13630 -2125
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