Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lee Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead costs are applied to products on the basis of

  1. Lee Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead costs are applied to products on the basis of machine hours. The denominator volume of machine hours is 9,000.

    Standard Quantity

    or Hours per unit

    Standard Price

    or Rate per unit

    Standard Cost

    per unit

    Direct Materials

    3 feet

    $6 per foot

    $18

    Direct Labor

    1.5 direct labor hours

    $10 per direct labor hour

    $15

    Variable Overhead

    2 machine hours

    $12 per machine hour

    $24

    Fixed Overhead

    2 machine hours

    $15 per machine hour

    $30

    Actual costs for the most recent period, during which 5,000 units of output were actually produced and used 9,600 machine hours, are given below:

    Direct Materials

    The firm purchased 16,000 feet at $6.30 per foot, but only used 14,500 feet in production.

    Direct Labor

    The firm used 7,150 direct labor hours and paid $11 per direct labor hour.

    Variable Overhead

    Actual variable overhead costs were $122,880.

    Fixed Overhead

    Actual fixed overhead costs were $142,000.

    What was the companys variable overhead rate variance?

    A.

    $7,680 unfavorable

    B.

    $2,880 favorable

    C.

    $2,880 unfavorable

    D.

    $7,680 favorable

2.

  1. Lee Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead costs are applied to products on the basis of machine hours. The denominator volume of machine hours is 9,000.

    Standard Quantity

    or Hours per unit

    Standard Price

    or Rate per unit

    Standard Cost

    per unit

    Direct Materials

    3 feet

    $6 per foot

    $18

    Direct Labor

    1.5 direct labor hours

    $10 per direct labor hour

    $15

    Variable Overhead

    2 machine hours

    $12 per machine hour

    $24

    Fixed Overhead

    2 machine hours

    $15 per machine hour

    $30

    Actual costs for the most recent period, during which 5,000 units of output were actually produced and used 9,600 machine hours, are given below:

    Direct Materials

    The firm purchased 16,000 feet at $6.30 per foot, but only used 14,500 feet in production.

    Direct Labor

    The firm used 7,150 direct labor hours and paid $11 per direct labor hour.

    Variable Overhead

    Actual variable overhead costs were $122,880.

    Fixed Overhead

    Actual fixed overhead costs were $142,000.

    What was the companys fixed overhead volume variance?

    A.

    $9,000 favorable

    B.

    $9,000 unfavorable

    C.

    $15,000 favorable

    D.

    $15,000 unfavorable

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

Statistical Models And Analysis In Auditing

Authors: National Research Council, Division On Engineering And Physical Sciences, And Applications Commission On Physical Sciences, Mathematics, Board On Mathematical Sciences, Committee On Applied And Theoretical Statistics, Panel On Nonstandard Mixtures Of Distributions

1st Edition

ISBN: 0309078172, 978-0309078177

More Books

Students also viewed these Accounting questions

Question

What is criterion validity? How is it assessed?

Answered: 1 week ago

Question

Please help me evaluate this integral. 8 2 2 v - v

Answered: 1 week ago