Question

In: Accounting

The Littlefield Company applies manufacturing overhead costs to products on the basis of direct labor-hours. The...

The Littlefield Company applies manufacturing overhead costs to products on the basis of direct labor-hours. The standard cost card shows that 12 direct labor-hours are required per unit of product. For August, the company budgeted to work 360,000 direct labor-hours and to incur the following total manufacturing overhead costs:

Total fixed overhead costs

$475,200

Total variable overhead costs

$396,000


During August, the company completed 28,000 units of product, worked 344,000 direct labor-hours, and incurred the following total manufacturing overhead costs:

Total fixed overhead costs

$461,200

Total variable overhead costs

$395,600


The denominator activity in the predetermined overhead rate is 360,000 direct labor-hours. The variable overhead spending variance for August is:

$17,200 F.

$17,200 U.

$26,000 F.

$26,000 U.

Solutions

Expert Solution

Budgeted variable overhead cost ($ )       396,000.00
Budgeted Direct Labor-hours ( Hours )       360,000.00
Budgeted variable overhead per hour ($ ) 1.1
Actual hours worked (hours )       344,000.00
Budgeted variable overhead for actual production ( 344,000 hours x $ 1.1 )       378,400.00
Actual variable overhead ($ )       395,600.00
Variable overhead spending variance = Actual hours worked x (Actual overhead rate - standard overhead rate)
                                                                   = $ 378,400 - $ 395,600 = $ 17,200 U

Related Solutions

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.
A manufacturing company applies factory overhead based on direct labor hours.
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000and direct labor hours would be 45,000. Actual manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 47,000. The entry to apply the factory overhead costs for the year would include aa. debit to factory overhead for $377,200.b. debit to factory overhead for $360,000.c. credit to factory overhead for $376,000.d. credit to...
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...
Hamilton company applies manufacturing overhead costs to product based on direct labor hours. the company estimates...
Hamilton company applies manufacturing overhead costs to product based on direct labor hours. the company estimates manufacturing overhead cots for the year to be 280000 and direct labor hours to be 20000. actual overhead and actual direct labor hours for the year were 335000 and 25000 hour respectively required 1. compute over or underapplied overhead 2a. which accounts will be affected by the over- or underapplied manufacturing overhead ? 2b. will the accounts be increased or decreased to abjust for...
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the...
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $327,691 and direct labor hours would be 46,813. Actual factory overhead costs incurred were $344,427, and actual direct labor hours were 51,254. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year? a.$31,087 underapplied b.$14,351 overapplied c.$14,351 underapplied d.$358,778 overapplied
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the...
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $540,000 and direct labor hours would be 45,000. Actual factory overhead costs incurred were $566,000, and actual direct labor hours were 47,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the...
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $344,000 and direct labor hours would be 45,000. Actual manufacturing overhead costs incurred were $316,200, and actual direct labor hours were 54,400. The entry to apply the factory overhead costs for the year would include a a.debit to Factory Overhead for $316,200 b.credit to Factory Overhead for $344,000 c.credit to Factory Overhead for $415,616 d.debit...
Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs...
Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $300,000 for the year, and machine usage is estimated at 125,000 hours. For the year, $322,000 of overhead costs are incurred and 130,000 hours are used. Collapse question part (a) Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.) Manufacturing overhead rate $ per machine hour
Ikea Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs...
Ikea Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $456,789 4 for the year, and machine usage is estimated at 126,000 hours For the year, $432450 of overhead costs are incurred and 125,500 hours are used. What is the predetermined overhead rate What is the amount of overhead applied Has it been over or underapplied? Prepare the adjusting entry to adjust the cost of goods sold
James Corp. applies overhead on the basis of direct labor hours. For the month of May,...
James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following overhead budget: Operating Levels Overhead Budget 80% Production in units 10,000 Standard direct labor hours 36,000 Budgeted overhead Variable overhead costs Indirect materials $ 21,600 Indirect labor 36,000 Power 7,200 Maintenance 3,600 Total variable costs 68,400 Fixed overhead costs Rent of factory building 20,000 Depreciation—Machinery...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT