Question

In: Accounting

Highfill Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card...

Highfill Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card for product D80D specifies 8.4 direct labor-hours per unit of D80D. The standard variable overhead rate is $5.60 per direct labor-hour. During the most recent month, 800 units of product D80D were made and 6,800 direct labor-hours were worked. The actual variable overhead incurred was $41,140. Required: Calculate both the variable overhead rate variance and efficiency variance for the month.

Solutions

Expert Solution

Actual DATA for

800

Units

Quantity (AQ)

Rate (AR)

Actual Cost

Variable Overhead

6800

$      6.05

$      41,140.00

Standard DATA for

800

Units

Quantity (SQ)

Rate (SR)

Standard Cost

[A]

[B]

[A x B]

Variable Overhead

( 8.4 Direct labor hours x 800 Units)=6720 Direct labor hours

$    5.60

$       37,632.00

Variable Overhead Rate Variance

(

Standard Rate

-

Actual Rate

)

x

Actual Labor Hours

(

$           5.60

-

$            6.05

)

x

6800

$(3,060.00)

Variance

$   3,060.00

Unfavourable-U

Variable Overhead Efficiency Variance

(

Standard Hours

-

Actual Hours

)

x

Standard Rate

(

6720

-

6800

)

x

$       5.60

$    (448.00)

Variance

$       448.00

Unfavourable-U

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Freytag Corporation's variable overhead is applied on the basis of direct labor-hours. The company has established...
Freytag Corporation's variable overhead is applied on the basis of direct labor-hours. The company has established the following variable overhead standards for product N06C: Standard direct labor-hours 3.7 hours per unit of N06C Standard variable overhead rate $ 5.50 per hour The following data pertain to the most recent month's operations during which 1,800 units of product N06C were made: Actual direct labor-hours worked 6,500 Actual variable overhead incurred $ 36,640 Required: a. What was the variable overhead rate variance...
MAnufacturing overhead is applied on the basis of direct labor hours. The direct labor hours for...
MAnufacturing overhead is applied on the basis of direct labor hours. The direct labor hours for the period are 500 and the estimated manufacturing overhead is 2000. actual direct labor hours were 160 and actual overhead was 1000. Compute the manufacturing overhead applied during this period.
Overhead is applied on the basis of direct labor hours. Three direct labor hours are required...
Overhead is applied on the basis of direct labor hours. Three direct labor hours are required for each product unit. Planned production for the period was set at 8,000 units. Manufacturing overhead for the period is budgeted at $204,000, of which 30 percent is fixed. The 26,200 hours worked during the period resulted in production of 8,500 units. Manufacturing overhead cost incurred was $220,500. Required: a. Calculate the overhead spending variance: b. Calculate the overhead efficiency variance: c. Calculate the...
Company uses standard costing. Overhead is applied to products on the basis of standard direct labor...
Company uses standard costing. Overhead is applied to products on the basis of standard direct labor hours for actual production. Data for company follows: Standard direct labor hours allowed for actual output 110,000 Actual direct labor hours 115,000 Direct labor hours budgeted in the master budget 120,000 Budgeted total variable overhead cost $360,000 Actual variable overhead cost 328,000 1.Calculate the variable overhead spending variance and whether it is favorable or unfavorable. 2.Calculate the variable overhead efficiency variance and whether it...
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:  Direct materials: 5 pounds at $8.00 per pound$40.00       Direct labor: 2 hours at $14 per hour28.00       Variable overhead: 2 hours at $5 per hour10.00       Total standard cost per unit$78.00     The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units...
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows
  Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:     Direct material: 5 pounds at $8.00 per pound $ 40.00 Direct labor: 4 hours at $15 per hour   60.00 Variable overhead: 4 hours at $5 per hour   20.00 Total standard variable cost per unit $ 120.00   The company also established the following cost formulas for its selling...
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:
  Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:     Direct material: 6 pounds at $8.00 per pound $ 48.00 Direct labor: 3 hours at $14 per hour   42.00 Variable overhead: 3 hours at $5 per hour   15.00 Total standard variable cost per unit $ 105.00   The company also established the following cost formulas for its selling...
Better Fitness Gear applies overhead on the basis of direct labor hours. Five direct labor hours...
Better Fitness Gear applies overhead on the basis of direct labor hours. Five direct labor hours are required for each unit produced. Planned production for the period was set at 8,000 units. Budgeted fixed manufacturing overhead for the period is budgeted at $20,000 and variable manufacturing overhead is budgeted at $100,000. The 48,500 hours worked during the period resulted in production of 9,500 units. Actual manufacturing overhead cost incurred was $156,000. Required: Calculate the three overhead variances: a.      Total...
Variable overhead $ 6,900 Fixed overhead 10,500 Actual labor cost (4,000 direct-labor hours) 74,400 Actual material...
Variable overhead $ 6,900 Fixed overhead 10,500 Actual labor cost (4,000 direct-labor hours) 74,400 Actual material cost (24,500 pounds purchased and used) 51,450 Overhead is budgeted and applied using direct-labor hours in a standard costing system. Standard cost and annual budget information are as follows: Standard Costs per Case Direct labor (4 hours at $18 per hour) $ 72.00 Direct material (30 pounds at $1.80 per pound) 54.00 Variable overhead (4 direct-labor hours at $2.10 per hour) 8.40 Fixed overhead...
ABC uses job-order costing. It applies overhead cost to jobs on the basis of direct labor-hours....
ABC uses job-order costing. It applies overhead cost to jobs on the basis of direct labor-hours. The following transactions took place during the year: a) $300,000 of raw materials were purchased on account b) Raw materials were issued into production: $90,000 direct materials and $40,000 indirect materials c) Labor costs incurred: $40,000 direct, $130,000 indirect, sales commissions $50,000, administrative salaries $100,000 d) Utility costs for the factory were $60,000 e) Depreciation recorded was $300,000 (70% related to factory; 30% related...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT