Answered step by step
Verified Expert Solution
Question
1 Approved Answer
World Company expects to operate at 90% of its productive capacity of 17,000 units per month. At this planned level, the company expects to use
World Company expects to operate at 90% of its productive capacity of 17,000 units per month. At this planned level, the company expects to use 13,770 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.900 direct labor hour per unit. At the 90% capacity level, the total budgeted cost includes $27,540 fixed overhead cost and $192,780 variable overhead cost. In the current month, the company incurred $302,020 actual overhead and 13,460 actual labor hours while producing 20,800 units. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations. Round "OH costs per DL hour" to 2 decimal places.) (1) Compute the predetermined standard overhead rate for total overhead. Predetermined OH rate Variable overhead costs Fixed overhead costs Total overhead costs (2) Compute the total overhead variance. Standard DL Hours ------Actual production 20,800 units -------- Overhead costs Actual results Variance applied Fav./Unf. Variable overhead costs Fixed overhead costs Total overhead costs
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