Question

In: Accounting

Akyede Groups of Companies uses a standard cost system for its production process and applies overhead...

Akyede Groups of Companies uses a standard cost system for its production process and applies overhead based on direct labour hours. The following information is available for May when Akyede produced 4,500 units: Standard: Direct labour hour per unit - 2.50, Variable overhead per direct labour hour - GH¢1.75, the fixed overhead per direct labour hour - GH¢3.10, Budgeted variable overhead - GH¢21,875, Budgeted fixed overhead - GH¢38,750. Actual: Direct labour hours - 10,000, Variable overhead- GH¢26,250, Fixed overhead- GH¢38,000. Calculate the total variable overhead cost and total fixed overhead cost variance, indicating the respective spending or expenditure variance and efficiency (volume) variance. show all workings clearly.

Solutions

Expert Solution

Particulars Budget Actual Variance = Budget - Actual Comments
Total Cost (given) GH¢ Qty= Total cost / per unit Per unit (given) Total Cost (given) GH¢ Qty (given) Per unit= Total/ Qty Total Cost GH¢ Qty Per unit Total Cost Qty Per unit
Variable overhead GH¢           21,875                     12,500         1.75           26,250    10,000                        2.63            -4,375    2,500       -0.88 Unfavorable Favorable Unfavorable
Fixed overhead GH¢           38,750                     12,500         3.10           38,000    10,000                        3.80                 750    2,500       -0.70 Favorable Favorable Unfavorable
Calculated field
Favorable if actual is less than budget
Unfavorable if actual is more than budget

Special note: Despite of unfavorable per unit fixed overhead, total cost is favorable due to Qty benefit

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

uses a standard cost accounting system and applies production overhead to products on the basis of...
uses a standard cost accounting system and applies production overhead to products on the basis of machine hours. The following information is available for the year just ended: Standard variable-overhead rate per hour: $7.20 Standard fixed-overhead rate per hour: $12.20 Planned activity during the period: 17,000 machine hours Actual production: 11,200 finished units Machine-hour standard: Two completed units per machine hour Actual variable overhead: $156,110 Actual total overhead: $445,030 Actual machine hours worked: 23,300 Required: 1. Calculate the budgeted fixed...
Lackawanna Licorice Company uses a standard cost accounting system and applies production overhead to products on...
Lackawanna Licorice Company uses a standard cost accounting system and applies production overhead to products on the basis of machine hours. The following information is available for the year just ended:    Actual variable overhead: $202,920 Actual total overhead: $558,030 Actual machine hours worked: 26,700 Standard variable-overhead rate per hour: $7.90 Standard fixed-overhead rate per hour: $13.20 Planned activity during the period: 26,000 machine hours Actual production: 15,700 finished units Machine-hour standard: Two completed units per machine hour    Required:...
Lott Company uses a job order cost system and applies overhead to production on the basis...
Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $22,600, direct labor $13,560, and manufacturing overhead $18,080. As of January 1, Job 49 had been completed at a cost of $101,700 and was part of finished goods inventory. There was a $16,950...
Lott Company uses a job order cost system and applies overhead to production on the basis...
Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 25,000, direct labor $ 15,000, and manufacturing overhead $ 20,000. As of January 1, Job No. 49 had been completed at a cost of $ 112,500 and was part of finished...
Hudson, Inc. uses a job order cost system and applies overhead to production on the basis...
Hudson, Inc. uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2018, Job #1 had been previously completed at a cost of $20,000 and was in Finished Goods Inventory. On January 1, 2018, Job #2 was the only job in process. The costs incurred on Job #2 during December 2017 were as follows: Direct Materials of $5,000, Direct Labor of $3,000 and Manufacturing Overhead of $6,000. There was...
ABC Company uses a job order cost system and applies overhead to production on the basis...
ABC Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2014, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job No. 49 had been completed at a cost of $90,000 and was part of finished goods inventory. There was...
Lott Company uses a job order cost system and applies overhead to production on the basis...
Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 22,000, direct labor $ 13,200, and manufacturing overhead $ 17,600. As of January 1, Job No. 49 had been completed at a cost of $ 99,000 and was part of finished...
Oriole Company uses a job order cost system and applies overhead to production on the basis...
Oriole Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $21,000, direct labor $12,600, and manufacturing overhead $16,800. As of January 1, Job 49 had been completed at a cost of $94,500 and was part of finished goods inventory. There was a $15,750...
Lott Company uses a job order cost system and applies overhead to production on the basis...
Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $22,400, direct labor $13,440, and manufacturing overhead $17,920. As of January 1, Job 49 had been completed at a cost of $100,800 and was part of finished goods inventory. There was a $16,800...
Weinrich Manufacturing uses a job order cost system and applies overhead to Production on the basis...
Weinrich Manufacturing uses a job order cost system and applies overhead to Production on the basis of direct labor hours. On January 1, 2016, Job No. 25 was the only job in process with total costs of $25,000. Estimated overhead costs are $480,000, direct labor costs are $300,000 and direct labor hours are 20,000 for the year. a. Calculate the predetermined overhead rate. b. Prepare the following entries: 1. Purchased raw materials of $50,000 on account. 2. Incurred factory labor...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT