il merthahts. The company mairntains warehouses that stock iter carried by its d
ID: 2525328 • Letter: I
Question
il merthahts. The company mairntains warehouses that stock iter carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, wh pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate ba on direct labor-hours. In the most recent month, 140,000 items were shipped to customers using 5,300 direct labor-hours. The company incurred a tot $15,900 in variable overhead costs. ing to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overi rate is $3.05 per direct labor-hour ook equirec 1. What is the standard labor-hours allowed (SH) to ship 140,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 140,000 items to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficiency variance? int int nces (For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "No no effect (i.e., zero variance). Input all amounts as positive values. Do no round intermediate calculations.) 1. Standard quantity of labor-hours allowed 2. Standard variable overhead cost allowed 3 Variable overhead spending variance 4. Variable overhead rate variance Variable overhead efficiency varianceExplanation / Answer
1 Standard quantity of labor hours=140000*0.03= 4200 2 Standard variable overhead cost = 4200*3.05= $12810 3 Variable overhead spending variance=15900-12810= $3090 U 4 Variable overhead rate variance=15900-(5300*3.05)= $265 F Variable overhead efficiency variance=3.05*(5300-4200)= $3355 U
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