Answered step by step
Verified Expert Solution
Question
1 Approved Answer
17/18 Sedona Company set the following standard costs for one unit of its product for 2017 Direct material (30 Ibs. @ 2.20 per Ib.) Direct
17/18
Sedona Company set the following standard costs for one unit of its product for 2017 Direct material (30 Ibs. @ 2.20 per Ib.) Direct labor (20 hrs. $4.20 per hr.) Factory variable overhead (20 hrs. $2.20 per hr.) Factory fixed overhead (20 hrs. $1.10 per hr.) Standard cost $ 66.00 84.00 44.00 22.00 $216.00 The $3.30 ($2.20 + $1.10) total overhead rate per direct labor hour is based on an expected operating level equal to 60% of the factory's capacity of 68,000 units per month. The following monthly flexible budget information is also available Operating Levels (% of capacit Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) 55% 37,400 60% 40,800 65% 44,200 884,000 748,000 816,000 Variable overhead Fixed overhead Total overhead $1,645,600 $1,795,200 $1,944,800 897,600 $2,543,200 $2,692,800 $2,842,400 897,600 897,600 During the current month, the company operated at 55% of capacity, employees worked 728,000 hours, and the following actual overhead costs were incurred Variable overhead costs Fixed overhead costs Total overhead costs $1,625,000 924,300 $2,549,300 AH Actual Hours SH Standard Hours AVR Actual Variable Rate SVR Standard Variable Rate SFR Standard Fixed Rate (1) Compute the predetermined overhead application rate per hour for variable overhead, fixed overhead, and total overhead at 60% of capacity Predetermined OH Rate Variable overhead costs Fixed overhead costs Total overhead costs (2) Compute the total variable and total fixed overhead variances and classify each as favorable or unfavorable At 55% of Operating Capacity Standard DL Overhead Actual HoursCosts AppliedResults Variance Fav./Unf Variable overhead costs Fixed overhead costs Total overhead costs 1. Compute the variable overhead spending and efficiency variances. Actual Variable OH Cost Flexible Budget Standard Cost (VOH applied) 3. Compute the controllable variance. Controllable Variance Controllable varianceStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started