Saved 24 o Required information The following information applies to the questio

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Saved 24 o 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. Part 2 of 2 .34 points 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 hr.) Standard cost 50.00 220.00 40.00 16.00 eBook 326.00 The $5.60 ($4.00+$1.60) total overhead rate per direct labor hour is 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 availlable. Hint Operating Levels(& of capacity) 758 37,500 80 708 35, 000 Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) Print 40,000 400,000 350,000 375,000 Variable overhead Fixed overhead Total overhead $1,400,000 1,500,000 $1,600,000 600,000 600,000 $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. $1,375,000 628,600 Variable overhead costs rixed overhead coata zotal overhead costa 2,003,600

Explanation / Answer

Answer a. Capacity 70% 75% 80% Direct Labor Hours            350,000.00            375,000.00        400,000.00 Variable Overhead        1,400,000.00        1,500,000.00    1,600,000.00 Predetermined Overhead Rate per DLH - Variable Overhead                         4.00                         4.00                     4.00 Fixed Overhead            600,000.00            600,000.00        600,000.00 Predetermined Overhead Rate per DLH - Fixed Overhead                         1.71                         1.60                     1.50 Total Overhead        2,000,000.00        2,100,000.00    2,200,000.00 Predetermined Overhead Rate per DLH - Total Overhead                         5.71                         5.60                     5.50 Answer b. Predetermined Overhead Rate Standard DLH 70% Capacity O/H Costs Applied Actual Variance Variable Overhead                         4.00            350,000.00    1,400,000.00       1,375,000.00          25,000.00 (F) Fixed Overhead                         1.71            350,000.00        600,000.00           628,600.00          28,600.00 (U) Total                         5.71    2,000,000.00       2,003,600.00             3,600.00 (U)

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