Question
Iser produces hubster s. Variable is applied based on direct labor hours. Iser expects production for the coming period to be 3840 units. At that
Iser produces hubsters. Variable is applied based on direct labor hours. Iser expects production for the coming period to be 3840 units. At that level of activity, variable overhead is expected to be $23040. It should take 2 direct labor hours to produce 1 hubster. Actual results are as follows: Number of hubsters produced: 3200 Actual direct labor hours: 7680 Actual variable overhead cost: $27648 1. Complete the following standard cost sheet:
Quantity | @ | Price | Total | |
Direct materials | 8 grams | $4.00 | $32.00 | |
Direct labor | 2 hours | $19.00 | $38.00 | |
Variable Overhead | 2 hours | $ ? | $ ? | |
Standard Unit Cost | $ ? |
Hints: The variable overhead rate per hours is based on estimated variable overhead and estimated labor hours. A flexible budget is expected costs at the ACTUAL level of activity. What would be in a flexible budget for materials cost? What would be in a flexible budget for labor cost? What would be in a flexible budget for variable overhead cost?
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