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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Department B is based on direct labor hours. At the beginning of
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estimates for the year:
Department A
Department B
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70,000
19,000
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60,000
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Fixed manufacturing overhead cost
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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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