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In: Accounting
Laughlin, Inc., uses a standard costing system. The predetermined overhead rates are calculated using practical capacity....
Laughlin, Inc., uses a standard costing system. The predetermined overhead rates are calculated using practical capacity. Practical capacity for a year is defined as 1,000,000 units requiring 200,000 standard direct labor hours. Budgeted overhead for the year is $750,000, of which $300,000 is fixed overhead. During the year, 900,000 units were produced using 190,000 direct labor hours. Actual annual overhead costs totaled $800,000, of which $294,700 is fixed overhead.
Calculate the fixed overhead spending and volume variances. Explain the meaning of the volume variance to the manager of Laughlin.
Calculate the variable overhead spending and efficiency variances. Is the spending variance the same as the direct materials price variance? If not, explain how it differs.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Overhead Variances, Four-Variance Analysis, Journal Entries Laughlin, Inc., uses a standard costing system. The predetermined overhead...
Overhead Variances, Four-Variance Analysis, Journal Entries
Laughlin, Inc., uses a standard costing system. The
predetermined overhead rates are calculated using practical
capacity. Practical capacity for a year is defined as 1,000,000
units requiring 200,000 standard direct labor hours. Budgeted
overhead for the year is $750,000, of which $300,000 is fixed
overhead. During the year, 900,000 units were produced using
190,000 direct labor hours. Actual annual overhead costs totaled
$800,000, of which $294,700 is fixed overhead.
Required:
1. Calculate the fixed...
Overhead Variances, Four-Variance Analysis, Journal Entries Laughlin, Inc., uses a standard costing system. The predetermined overhead...
Overhead Variances, Four-Variance Analysis, Journal Entries
Laughlin, Inc., uses a standard costing system. The
predetermined overhead rates are calculated using practical
capacity. Practical capacity for a year is defined as 1,000,000
units requiring 200,000 standard direct labor hours. Budgeted
overhead for the year is $750,000, of which $300,000 is fixed
overhead. During the year, 900,000 units were produced using
190,000 direct labor hours. Actual annual overhead costs totaled
$800,000, of which $294,700 is fixed overhead.
Required:
1. Calculate the fixed...
Baker enterprises, Inc., has a job-order costing system. The company uses predetermined overhead rates in applying...
Baker enterprises, Inc., has a job-order costing system. The
company uses predetermined overhead rates in applying manufacturing
overhead cost to individual jobs. The predetermined overhead rate
in Department A is based on machine-hours, and the rate in
Department B is based on direct labor hours. At the beginning of
the most recent year, the company’s management made the following
estimates for the year:
Department A
Department B
Machine-hours.............
70,000
19,000
Direct labor-hours.........
30,000
60,000
Direct materials............
$195,000
$282,000
Direct labor.....................
Dotsero Technology, Inc., has a job-order costing system. The company uses predetermined overhead rates in applying...
Dotsero Technology, Inc., has a job-order costing system. The
company uses predetermined overhead rates in applying manufacturing
overhead cost to individual jobs. The predetermined overhead rate
in Department A is based on machine-hours, and the rate in
Department B is based on direct labor hours. At the beginning of
the most recent year, the company's management made the following
estimates for the year.
Dept. A Dept. B
Machine-hours. . . . . . . . . . . . ....
Flandro Company uses a standard cost system and sets predetermined overhead rates on the basis of...
Flandro Company uses a standard cost system and sets
predetermined overhead rates on the basis of direct labor-hours.
The following data are taken from the company’s budget for the
current year:
Denominator activity (direct labor-hours)
9,000
Variable manufacturing overhead cost
$
29,250
Fixed manufacturing overhead cost
$
96,750
The standard
cost card for the company’s only product is given below:
Direct materials, 4 yards at $2.05 per yard
$ 8.20
Direct labor, 2 hour at $10.00 per hour
20.00...
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ABC Manufacturing Company uses a job-order costing system. The
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overhead to individual jobs. The predetermined overhead rate in the
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Table Department is based on machine hours, and the rate in the
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the most recent year, members of the management team made the
following estimates for the year:
(Estimated) ...
Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...
Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses
a standard costing system and develops its overhead rates from the
current annual budget. The budget is based on an expected annual
output of 124,000 units requiring 496,000 direct labor hours.
(Practical capacity is 516,000 hours.) Annual budgeted overhead
costs total $818,400, of which $585,280 is fixed overhead. A total
of 119,400 units using 494,000 direct labor hours were produced
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Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...
Overhead Variances, Four-Variance Analysis
Oerstman, Inc., uses a standard costing system and develops its
overhead rates from the current annual budget. The budget is based
on an expected annual output of 123,000 units requiring 492,000
direct labor hours. (Practical capacity is 512,000 hours.) Annual
budgeted overhead costs total $816,720, of which $585,480 is fixed
overhead. A total of 119,500 units using 490,000 direct labor hours
were produced during the year. Actual variable overhead costs for
the year were $261,100, and...
Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...
Overhead Variances, Four-Variance Analysis
Oerstman, Inc., uses a standard costing system and develops its
overhead rates from the current annual budget. The budget is based
on an expected annual output of 125,000 units requiring 500,000
direct labor hours. (Practical capacity is 520,000 hours.) Annual
budgeted overhead costs total $830,000, of which $585,000 is fixed
overhead. A total of 119,300 units using 498,000 direct labor hours
were produced during the year. Actual variable overhead costs for
the year were $260,000, and...
Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...
Overhead Variances, Four-Variance Analysis
Oerstman, Inc., uses a standard costing system and develops its
overhead rates from the current annual budget. The budget is based
on an expected annual output of 130,000 units requiring 520,000
direct labor hours. (Practical capacity is 540,000 hours.) Annual
budgeted overhead costs total $842,400, of which $608,400 is fixed
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were produced during the year. Actual variable overhead costs for
the year were $261,900, and...
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