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Exercise 21-19 Cm putation of total overhead rate and total overhead variance LO P3 World Company expects to operate at 90% of its productive capacity
Exercise 21-19 Cm putation of total overhead rate and total overhead variance LO P3 World Company expects to operate at 90% of its productive capacity of 30,000 units per month. At this planned level, the company expects to use 10,800 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.400 direct labor hours per unit. At the 90% capacity level, the total budgeted cost includes $21,600 fixed overhead cost and $194,400 variable overhead cost. In the current month, the company incurred $120,700 actual overhead and 6,380 actual labor hours while producing 14,400 units. (Do not round intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.) (1) Compute the predetermined standard overhead rate for total overhead Predetermined OH rate 18.00 per DL hr 2.00 per DL hr 20.00 per DL hr Variable overhead costs S Fixed overhead costs Total overhead costs (2) Compute the total overhead variance Actual production 14,400 units - Predetermined Standard Overhead Actual Variance Fav./Unf OH rate DL Hours costs applied results 18.00 2.00 20.00 Variable overhead costs $ Fixed overhead costs Total overhead costs
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