Combined Overhead Rate The Wright-Peterson Air Force Base contained an extensive repair facility for jet engines. It
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Combined Overhead Rate The Wright-Peterson Air Force Base contained an extensive repair facility for jet engines. It had developed standard costing and flexible budgets for this activity. Budgeted variable overhead at a 16,000 standard monthly direct-labor-hour level was $64,000; budgeted total overhead at a 20,000 standard direct-labor-hour level was $197,600. The standard cost applied to repair output included a combined overhead rate of 120 percent of standard direct-labor cost. . »
Total actual overhead for October was $250,000. Direct-labor costs actually incurred were $202,440. The direct-labor price variance was $9,640, unfavorable. The diect-labor budget variance was $14,440, unfavorable. The standard labor price was $8.00 per hour. The denominator variance was $14,000, favorable.
Direct-labor efficiency variance. Combined overhead spending, efficiency, and denominator variances. Also compute the denominator volume. (Hint: See Exhibit 9-7.)
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