Question
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
-
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.
-
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started