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Exercise 21-19 Computing total overhead rate and total overhead variance LO P4 World Company expects to operate at 90% of its productive capacity of 23,000
Exercise 21-19 Computing total overhead rate and total overhead variance LO P4 World Company expects to operate at 90% of its productive capacity of 23,000 units per month. At this planned level, the company expects to use 12,420 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.600 direct labor hour per unit. At the 90% capacity level, the total budgeted cost includes $37.260 fixed overhead cost and $99,360 variable overhead cost in the current month, the company incurred $208,300 actual overhead and 11,970 actual labor hours while producing 30,500 units. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.) ) Compute the predetermined standard overhead rate for total overhead Predetermined OH rate Variable overhead costs $ 8.00 per DL.hr Fixed overhead costs 3.00 per Dlh Total overhead costs $ 11.00 per DL (2) Compute the total overhead variance ........Actual production 30,500 units Overhead costs Actual results Variance applied Fav Unt. Variable overhead costs Fixed overhead costs Total overhead costs Predetermined Standard OH rate DL Hours $ 8.00 3.00 $ 11.00 $
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