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Homework: Flexible Budgets Assignment Saved Help Save & Exit Submit Check my work Check My Work button is now enabled The standard overhead rate ($18.50
Homework: Flexible Budgets Assignment
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The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level of 75% of the factorys capacity of 20,000 units per month. Following are the companys budgeted overhead costs per month at the 75% capacity level.
Overhead Budget (75% Capacity) | |
---|---|
Variable overhead costs | |
Indirect materials | $ 15,000 |
Indirect labor | 75,000 |
Power | 15,000 |
Maintenance | 30,000 |
Total variable overhead costs | 135,000 |
Fixed overhead costs | |
DepreciationBuilding | 25,000 |
DepreciationMachinery | 72,000 |
Taxes and insurance | 18,000 |
Supervisory salaries | 249,500 |
Total fixed overhead costs | 364,500 |
Total overhead costs | $ 499,500 |
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (60,500 pounds @ $6.10 per pound) | $ 369,050 | |
---|---|---|
Direct labor (22,000 hours @ $12.10 per hour) | 266,200 | |
Overhead costs | ||
Indirect materials | $ 41,500 | |
Indirect labor | 176,100 | |
Power | 17,250 | |
Maintenance | 34,500 | |
DepreciationBuilding | 25,000 | |
DepreciationMachinery | 97,200 | |
Taxes and insurance | 16,200 | |
Supervisory salaries | 249,500 | 657,250 |
Total costs | $ 1,292,500 |
2. Compute the direct materials variance, including its price and quantity variances.
Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.
2. Compute the direct materlals varlance, Including its price and quantity varlances. Note: Inclcate the effect of each varlance by selecting favorable, unfavorable, or no varlance. 2. Compute the direct materlals varlance, Including its price and quantity varlances. Note: Inclcate the effect of each varlance by selecting favorable, unfavorable, or no varlanceStep by Step Solution
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