Question
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...
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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............
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$282,000
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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
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Flandro Company uses a standard cost system and sets predetermined overhead rates on the basis of...
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The following data are taken from the company’s budget for the
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9,000
Variable manufacturing overhead cost
$
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Fixed manufacturing overhead cost
$
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The standard
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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.
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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
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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 125,000 units requiring 500,000
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budgeted overhead costs total $830,000, of which $585,000 is fixed
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Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...
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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
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