Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Derf Company allocated overhead on the basis of direct labor hours. Two direct labor hours are required for each unit of product. Planned production for

Derf Company allocated overhead on the basis of direct labor hours. Two direct labor hours are required for each unit of product. Planned production for the period was set at 9,000 units. Manufacturing overhead is estimated at $135,000 for the period (20% of this amount is fixed). 17,200 direct labor hours were actually used to produce 8,500 units. Actual variable manufacturing overhead cost was $108,500. Actual fixed manufacturing overhead cost was $28,000.

A. Calculate the variable overhead spending and quantity (efficiency) variances.

B. Determine the fixed overhead spending and production volume variances.

C. Prepare the journal entries to record the overhead variances.

D. Prepare the journal entries to close the overhead variances. Assume the following account balances before pro-ration:

WIP $10,000

FG $25,000

COGS $150,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting 2007 FASB Update Volume 1

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

12th Edition

0470128755, 978-0470128756

More Books

Students also viewed these Accounting questions

Question

Are there any changes you would recommend in the selection process?

Answered: 1 week ago