Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours.

Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. Variable manufacturing overhead should be $4.80 per standard direct labor-hour and fixed manufacturing overhead should be $2,112,000 per year.

The company?s product requires 4 pounds of material that has a standard cost of $10.00 per pound and 1.5 hours of direct labor time that has a standard rate of $13.40 per hour.

The company planned to operate at a denominator activity level of 240,000 direct labor-hours and to produce 160,000 units of product during the most recent year. Actual activity and costs for the year were as follows:

Number of units produced192,000
Actual direct labor-hours worked312,000
Actual variable manufacturing overhead cost incurred$ 873,600
Actual fixed manufacturing overhead cost incurred$ 2,184,000

image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting Foundations and Evolutions

Authors: Michael R. Kinney, Cecily A. Raiborn

8th Edition

9781439044612, 1439044619, 978-1111626822

More Books

Students also viewed these Accounting questions