Question
Neon company manufactured 2,500 units during April with a total overhead actual of $60,000. Neon uses direct labor hour to allcate fixed and variable overhead.
Neon company manufactured 2,500 units during April with a total overhead actual of $60,000. Neon uses direct labor hour to allcate fixed and variable overhead. However, while manufacturing the 2,500 units the microcomputer that contained the month's cost information broke down. With the computer out of commission, the accountant has been unable to complete the variance analysis report. You have been called in to help.
Variable overhead:
Standard cost per unit: 1.2 direct labor hour at $10 per hour. Actual costs: $26,250 for 2,250 hours
Fixed overhead:
Planned units of production: 2,800, Flexible-budget variance:$200 favorable (Note: round up to two decimal points for the fixed cost rate)
Prepare the respective journal entries to capture: a.) variable and fixed overhead applied.
Please show your work, I'm really confused on finding fixed overhead part.
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