Sedona Company set the following standard costs for one unit of its product for this year....
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Sedona Company set the following standard costs for one unit of its product for this year. Direct material (30 pounds @ $2.00 per pound) Direct labor (20 hours @ $4.50 per DLH) Variable overhead (20 hours @ $2.90 per DLH) Fixed overhead (20 hours @ $1.20 per DLH) Standard cost per unit S 60.00 90.00 58.00 24.00 $ 232.00 The $4.10 ($2.90 + $1.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40.950 units, which is 65% of the factory's capacity of 63,000 units per month. The following monthly flexible budget information is available. Operating Levels (% of Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhead Variable overhead capacity) 60% 65% 37,800 40,950 70% 44,100 756,000 819,000 882,000 S $ S Fixed overhead Total overhead 2,192,400 2,375,100 2,557,800 982,800 982,800 982,800 $ S 3,175,200 3,357,900 3,540,600 During the current month, the company operated at 60% of capacity, direct labor of 726,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead $ 2,120,000 Actual fixed overhead 1,065,000 Actual total overhead 3,185,000 Exercise 23-27A (Algo) Computing total variable and fixed overhead variances LO P5 1. Compute the total variable overhead variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. ---At 60% of Operating Capacity-... Standard Direct Labor Hours Overhead Rate Standard Direct Labor Hours Standard Overhead Actual Overhead Applied Favorable or Overhead Variance Unfavorable Sedona Company set the following standard costs for one unit of its product for this year. Direct material (30 pounds @ $2.00 per pound) Direct labor (20 hours @ $4.50 per DLH) Variable overhead (20 hours @ $2.90 per DLH) Fixed overhead (20 hours @ $1.20 per DLH) Standard cost per unit S 60.00 90.00 58.00 24.00 $ 232.00 The $4.10 ($2.90 + $1.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 40.950 units, which is 65% of the factory's capacity of 63,000 units per month. The following monthly flexible budget information is available. Operating Levels (% of Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhead Variable overhead capacity) 60% 65% 37,800 40,950 70% 44,100 756,000 819,000 882,000 S $ S Fixed overhead Total overhead 2,192,400 2,375,100 2,557,800 982,800 982,800 982,800 $ S 3,175,200 3,357,900 3,540,600 During the current month, the company operated at 60% of capacity, direct labor of 726,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead $ 2,120,000 Actual fixed overhead 1,065,000 Actual total overhead 3,185,000 Exercise 23-27A (Algo) Computing total variable and fixed overhead variances LO P5 1. Compute the total variable overhead variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. ---At 60% of Operating Capacity-... Standard Direct Labor Hours Overhead Rate Standard Direct Labor Hours Standard Overhead Actual Overhead Applied Favorable or Overhead Variance Unfavorable
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