hapter 21 Homework 0 Help 23 0 Required information The following information ap

Question

hapter 21 Homework 0 Help 23 0 Required information The following information applies to the questions displayed below Sedona Company set the following standard costs for one unit of its product for 2017 art 1 of 2 34 oints Direct material (20 Ibs. $2.50 per Ib.) Direct labor (10 hrs 22.00 per hr Factory variable overhead (10 hrs. $4.00 per hr.) Factory fixed overhead (10 hrs. $1.60 per he.) Standard cost s 50.00 220.00 40.00 16.00 $326.00 eBook The $5.60 $4.00 + $1.60 total overhead rate per direct labor hour ls based on an expected operating level equal to 75% of the factory's capacity of 50,000 units per month. The following monthly flexible budget information is also available. Hint Operating Levels of capacity) 75 Plexible Budget Budgeted output (units Budgeted labor (standard houra) Budgeted overhead (dollars) 70% 35,000 80% 40,000 Print 7,500 375,000 350,000 400,000 Variable overhead Fixed overhead Total overhead 1,400,000 1,500,000 1,600,000 600,000 600,000600,000 $2,000,000 2, 100,000 2,200,000 During the current month, the company operated at 70% of capacity, employees worked 340,000 hours, and the following actual overhead costs were incurred. Variable overhead costa Pixed overhead costs Total overhead costs 1,375,000 628,600 2,003,600

Explanation / Answer

Predetermined OH Rate Variable overhead costs (1500000/375000) $4.00 per DL hr. Fixed overhead costs (600000/375000) 1.6 per DL hr. Total overhead costs $5.60 At 70% of Operating Capacity Predetermined over head rate Standard DL Hours Overhead Costs Applied Actual Results Variance Fav./Unf. Variable overhead costs $4.00 350,000 $1,400,000 $1,375,000 $25,000 Favorable Fixed overhead costs 1.6 350,000 560,000 628,600 ($68,600) Unfavorable Total overhead costs $5.60 $1,960,000 $2,003,600 ($43,600) Unfavorable 350000*4 = 1400000 1.6*350000= 560000

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