Question
In: Accounting
Friar Inc produces one product and the company uses a standard cost system and determines that...
Friar Inc produces one product and the company uses a standard cost system and determines that it should take one hour of direct labor to produce one unit. The normal production capacity is 150,000 units per year. The total budgeted overhead at normal capacity is 450,000 dollars comprised of 195,000 of variable costs and 255,000 of fixed costs. Overhead is applied on the basis of direct labor hours. During the current year, the company produced 156,000 units worked 160,000 direct labor hours, and incurred variable overhead costs of 210,000 and fixed overhead costs of 255,000. INSTRUCTIONS: Compute the total overhead variance and note whether the variance is favorable or unfavorable
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ekkarill92 answered 2 years agoRelated Solutions
Wallis Company manufactures only one product and uses a standard cost system. The company uses a...
Wallis Company manufactures only one product and uses a standard
cost system. The company uses a predetermined plantwide overhead
rate that relies on direct labor-hours as the allocation base. All
of the company's manufacturing overhead costs are fixed—it does not
incur any variable manufacturing overhead costs. The predetermined
overhead rate is based on a cost formula that estimated $2,892,000
of fixed manufacturing overhead for an estimated allocation base of
289,200 direct labor-hours. Wallis does not maintain any beginning
or ending...
Phoenix Company manufactures only one product and uses a standard cost system. The company uses a...
Phoenix Company manufactures only one product and uses a
standard cost system. The company uses a plantwide predetermined
overhead rate that relies on direct labor-hours as the allocation
base. The predetermined overhead rate is based on a cost formula
that estimated $2,887,200 of fixed and variable manufacturing
overhead for an estimated allocation base of 240,600 direct
labor-hours. Phoenix does not maintain any beginning or ending work
in process inventory.
The company’s beginning balance sheet is as follows:
Phoenix Company
Balance...
Wallis Company manufactures only one product and uses a standard cost system. The company uses a...
Wallis Company manufactures only one product and uses a standard
cost system. The company uses a predetermined plantwide overhead
rate that relies on direct labor-hours as the allocation base. All
of the company's manufacturing overhead costs are fixed—it does not
incur any variable manufacturing overhead costs. The predetermined
overhead rate is based on a cost formula that estimated $2,886,000
of fixed manufacturing overhead for an estimated allocation base of
288,600 direct labor-hours. Wallis does not maintain any beginning
or ending...
Flounder Company produces one product, a putter called GO-Putter. Flounder uses a standard cost system and...
Flounder Company produces one product, a putter called
GO-Putter. Flounder uses a standard cost system and determines that
it should take one hour of direct labor to produce one GO-Putter.
The normal production capacity for this putter is 130,000 units per
year. The total budgeted overhead at normal capacity is $1,170,000
comprised of $390,000 of variable costs and $780,000 of fixed
costs. Flounder applies overhead on the basis of direct labor
hours.
During the current year, Flounder produced 79,100 putters,...
Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and...
Byrd Company produces one product, a putter called GO-Putter.
Byrd uses a standard cost system and determines that it should take
one hour of direct labor to produce one GO-Putter. The normal
production capacity for this putter is 100,000 units per year. The
total budgeted overhead at normal capacity is $900,000 comprised of
$300,000 of variable costs and $600,000 of fixed costs. Byrd
applies overhead on the basis of direct labor hours.
During the current year, Byrd produced 72,700 putters,...
Moleno Company produces a single product and uses a standard cost system. The normal production volume...
Moleno Company produces a single product and uses a standard
cost system. The normal production volume is 120,000 units; each
unit requires five direct labor hours at standard. Overhead is
applied on the basis of direct labor hours. The budgeted overhead
for the coming year is as follows:
FOH
$2,160,000*
VOH
1,440,000
* At normal volume.
During the year, Moleno produced 118,600 units, worked 592,300
direct labor hours, and incurred actual fixed overhead costs of
$2,150,400 and actual variable overhead...
Pardoe, Inc., manufactures a single product. The company uses a standard cost system and has established...
Pardoe, Inc., manufactures a single product. The company uses a
standard cost system and has established the following standards
for one unit of product:
Standard
Quantity of inputs
Standard Price
or Rate per input
Standard
Cost per unit
Direct materials
1.5 pounds
$3.20 per pound
$4.80
Direct labor
0.7 hours
$5.00 per hour
$3.50
Pardoe's budget for March used estimated production and sales of
2,900 units.
During March, the following activity was recorded by the
company:
The company produced 3,000...
Owen limited uses a standard costing system. The standard cost card for one product is shown...
Owen limited uses a standard costing system. The standard cost
card for one product is shown below.
Direct material
4kg @$5 per
kg
20
Direct labour
2 hour @ $8 per
hour
16
Variable
overhead
2 hours @ $3.5 per
hour
7
Total variable
cost
43
Fixed
overhead
2 hours @ $7 per
hour
14
Total production
cost
57
Standard selling
price
70
Standard profit
margin
13
The budgeted output and sales was 1000 units. Actual production
and...
HalimSdnBhd uses a standard costing system. The standard cost card for one product is shown below:...
HalimSdnBhd uses a standard costing system. The standard cost
card for one product is shown below:
Direct Material 4 kg at RM5 per kg
RM
20
Direct Labor 2 hours at RM8 per hour 16
Variable Overhead 2 hours at RM 7.5 per hour15
Total Product Cost 51
The budgeted output and sales was 1,000 units. Actual output for
the period was 1,300 units . Actual cost was as follows:
Direct
Material:
5,000 kg, costing 22,750
Direct
Labor:
2,860 hours,...
Regency Corp. uses a standard cost system to account for the costs of its one product....
Regency Corp. uses a standard cost system to account for the
costs of its one product. Fixed overhead is applied to production
at a rate of $27.10 per unit, based on budgeted production is 2,445
per month. During November, Regency produced 2,295 units. Fixed
overhead incurred totaled $70,420.
a. Calculate the fixed overhead spending
variance.
b. Calculate the fixed overhead volume
variance.
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