Sedona Company set the following standard costs for one unit of its product for 2013. The $5.60

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Sedona Company set the following standard costs for one unit of its product for 2013.

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The $5.60 ($4.00 + $1.60) total overhead rate per direct labor hour is based on an expected operating level equal to 75% of the factory’s capacity of 50,000 units per month. The following monthly flexible budget information is also available.

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During the current month, the company operated at 70% of capacity, employees worked 340,000 hours, and the following actual overhead costs were incurred.

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(1) Show how the company computed its predetermined overhead application rate per hour for total overhead, variable overhead, and fixed overhead. (2) Compute the total variable and total fixed overhead variances.

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Related Book For  book-img-for-question

Fundamental Accounting Principles Volume 2

ISBN: 9780077716660

21st Edition

Authors: John Wild, Ken Shaw, Barbara Chiappetta

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