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Direct materials (30 lbs. $4 per lb.) 120.00 Direct labor (5 hrs. $14 per hr.) 70.00 Factory overhead variable (5 hrs. S8 per hr.) 40.00
Direct materials (30 lbs. $4 per lb.) 120.00 Direct labor (5 hrs. $14 per hr.) 70.00 Factory overhead variable (5 hrs. S8 per hr.) 40.00 Factory overhead fixed (5 hrs. S10 per hr.) 50.00 Total standard cost 280.00 The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available. Operating Levels 70% 80% 90% 42,000 54,000 Production in units 48,000 270,000 Standard direct labor hours 210,000 240,000 Budgeted overhead 2,400,000 $2,400,000 $2,400,000 Fixed factory overhead Variable factory overhead 1,680,000 1,920,000 2,160,000 During the current quarter, the company operated at 90% of capacity and produced 54,000 units of product, actual direct labor totaled 265,000 hours. Units produced were assigned the following standard costs: 6,480,000 Direct materials (1,620,000 lbs. $4 per lb.) 3,780,000 Direct labor (270,000 hrs. $14 per hr.) 4,860,000 Factory overhead (270,000 hrs. $18 per hr.) 15,120,000 Total standard cost Actual costs incurred during the current quarter follow: Direct materials (1,615,000 lbs. $4.10 per lb-) 6,621,500 Direct labor (265,000 hrs. $13.75 per hr.) 3,643,750 2,350,000 Fixed factory overhead costs 2,200,000 Variable factory overhead costs Total actual costs 14,815,250
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