(Computation of all overhead variances) The manager of Missouris Depart ment of Transportation has determined that it...
Question:
(Computation of all overhead variances) The manager of Missouri’s Depart¬ ment of Transportation has determined that it typically takes 30 minutes for the department’s employees to register a new car. In Boone County, the fixed overhead rate computed on an estimated 4,000 direct labor hours is $8 per direct labor hour, whereas the variable overhead rate is estimated at $3 per direct labor hour.
During July, 7,600 cars were registered in Boone County and 3,700 di¬ rect labor hours were worked in registering those vehicles. For the month, variable overhead was $10,730 and fixed overhead was $29,950.
a. Compute overhead variances using a four-variance approach.
b. Compute overhead variances using a three-variance approach.
c. Compute overhead variances using a two-variance approach.
LO.1
Step by Step Answer:
Cost Accounting Foundations And Evolutions
ISBN: 9780324235012
6th Edition
Authors: Michael R. Kinney, Jenice Prather-Kinsey, Cecily A. Raiborn