Lackawanna Licorice Company uses a standard cost accounting system and applies p

Question

Lackawanna Licorice Company uses a standard cost accounting system and applies production overhead to products on the basis of machine hours. The following information is available for the year just ended: Actual variable overhead: $173,010 Actual total overhead: $481,110 Actual machine hours worked: 23,700 Standard variable-overhead rate per hour: $7.60 Standard fixed-overhead rate per hour: $12.80 Planned activity during the period: 23,000 machine hours Actual production: 14,200 finished units Machine-hour standard: Two completed units per machine hour Required: 1. Calculate the budgeted fixed overhead for the year. Budgeted fixed overhead

Explanation / Answer

Req 1. Budgeted hours: 23000 hours Std fixed OH rate: 12.80 Budgeted Fixed OH: 23000 hours@ 12.80 = $294,400 Req 2: Std Variable OH rate per hour: $ 7.60 per hour Actual MH: 23700 hours Variable OH spending variance= Actual MH *Std rate- Actual variable OH 23700*7.60- 173010= 7110 F Req 3: Fixed OH volume Variance = Std fixed OH for actual output - Budgeted Fixed OH (14200units*2 *12.80) - 294400 = $ 69120 F Req 4: Company spent more. Req 4-b Fixed OH budget Variance: Budgetd Fixed OH -Actual fixed overheads 294400 - 308100 = 13700 U Req 5 Actual variable OH cost incurred 173010 Less: Variable oH applied (23700 hours@7.60) 180120 Variable OH overe-applied -7110

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.