price aH0 eniciu ances suggest that Great Guard\'s malagtiu Great-Cut processes
ID: 2555491 • Letter: P
Question
price aH0 eniciu ances suggest that Great Guard's malagtiu Great-Cut processes bags of frozen organic vegetables sold at special Cut allocates manufacturing overhead based on direct labour hours. total overhead for the year to be $765,000. Of this amount, $595,000 head expenses. Great-Cut expects to process 170,000 cases of frozen organic this year. The direct labour standard for each case is 1/4 hour. sold at specialty grocery stores. Great ct labour hours. Great-Cut has proiect E10-51B Compute standard manufacturing overhead rates (Learning relates to fixed over anic vegetables Requirements 1. Compute the standard variable overhead rate. 2. Compute the fixed overhead rate. 3. Compute the standard total overhead rate.Explanation / Answer
1) calculation of variable overhead rate:
Variable overhead=765000-595000= 170000
Direct labour hours=170000*1/4= 42500
Variable overhead rate= variable overhead/direct labour hours
=170000/42500=$4
Standard variable overhead rate is $4
2) calculation of fixed overhead rate:
Fixed overhead rate= fixed overhead/direct labour hours
= 595000/42500=$14
Fixed overhead rate is$14
3) calcicalcul of standard total overhead rate:
Standard total overhead rate=total overhead/direct labour hours
=765000/42500=$18
Total overhead rate is $18
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