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You have started working as a cost accountant for a firm that has only been in business for one month. The firm is able
You have started working as a cost accountant for a firm that has only been in business for one month. The firm is able to buy a new type of biodegradable plastic at a fixed price of $100 per roll. The plastic is then cut and sealed to make garbage bags. Fixed factory overhead is estimated to be $125,000 per month. During this past month, 8,000 cartons of garbage bags were produced, which represents 80% of the activity volume. You are given the following information: Rolls of plastic used 40 Variable overhead incurred $61,000 Overhead efficiency variance $5,000 U Standard costs per carton of garbage bags: Labour hours Wage rate Total overhead Rolls of plastic Calculate the following: 2 $8 per hour $20 0.004 rolls (a) Applied overhead per direct labour hour. Applied overhead per direct labour hour LA 7.81
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