Branch Corporation uses a standard cost system to account for the costs of its one product Variable overhead is applied using direct labor hours. Standards allowed for each unit are 13 hours of labor at a variable overhead rate of $21. During November, Branch Corporation produced 2.850 units. Payroll totaled $98,180 for 5,090 hours worked. Variable overhead incurred totaled $122.185. Required: a. Calculate the variable overhead rate variance. Note: Round your intermediate calculations to two decimals and final answers to nearest whole dollar. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). b. Calculate the variable overhead efficiency variance Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). c. Calculate the variable overhead spending variance. Note: Round your intermediate calculations to two decimals and final answers to nearest whole dollar. Indicate the

Branch Corporation uses a standard cost system to account for the costs of its one product Variable overhead is applied using direct labor hours. Standards allowed for each unit are 13 hours of labor at a variable overhead rate of $21. During November, Branch Corporation produced 2.850 units. Payroll totaled $98,180 for 5,090 hours worked. Variable overhead incurred totaled $122.185. Required: a. Calculate the variable overhead rate variance. Note: Round your intermediate calculations to two decimals and final answers to nearest whole dollar. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). b. Calculate the variable overhead efficiency variance Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). c. Calculate the variable overhead spending variance. Note: Round your intermediate calculations to two decimals and final answers to nearest whole dollar. Indicate the

Name: Rakesh Branch Corporation uses a standard cost system to account for t
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Description: Rakesh Branch Corporation uses a standard cost system to account for the costs of its one product. Variable overhead is appliedusing direct labor hours. Standards allowed for each unit are 1,3 hours of labor at a variable overhead rate of $21. During

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...

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Misterio Company uses a standard costing system. During the past quarter, the following variances were computed: Misterio applies variable overhead using a standard rate of 2 per direct labor hour allowed. Two direct labor hours are allowed per unit produced. (Only one type of product is manufactured.) During the quarter, Misterio used 30 percent more direct labor hours than should have been used. Required: 1. What were the actual direct labor hours worked? The total hours allowed? 2. What is the standard hourly rate for direct labor? The actual hourly rate? 3. How many actual units were produced?
Rath Company showed the following information for the year: Required: 1. Calculate the standard direct labor hours for actual production. 2. Calculate the applied variable overhead. 3. Calculate the total variable overhead variance.
Eagle Inc. uses a standard cost system. During the most recent period, the company manufactured 115,000 units. The standard cost sheet indicates that the standard direct labor cost per unit is $1.50. The performance report for the period includes an unfavorable direct labor rate variance of $3,700 and a favorable direct labor time variance of $10,275. What was the total actual cost of direct labor incurred during the period?
ThingOne Company has the following information available for the past year. They use machine hours to allocate overhead. What is the variable overhead efficiency variance?
Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: During the year, the company had the following activity: Actual fixed overhead was 12,000 less than budgeted fixed overhead. Budgeted variable overhead was 5,000 less than the actual variable overhead. The company used an expected actual activity level of 12,000 direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. Required: 1. Compute the unit cost using (a) absorption costing and (b) variable costing. 2. Prepare an absorption-costing income statement. 3. Prepare a variable-costing income statement. 4. Reconcile the difference between the two income statements.
ABC Inc. spent a total of $48,000 on factory overhead. Of this, $28,000 was fixed overhead. ABC Inc. had budgeted $27,000 for fixed overhead. Actual machine hours were 5.000. Standard hours for units made were 4,800. The standard variable overhead rate was $4.10. What is the variable overhead rate variance?
Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The following cost data have been prepared for its estimated upper and lower limits of activity: Overhead: Selling and administrative expenses: Required: 1. Classify each cost element as either variable, fixed, or semi-variable. (Hint: Recall that variable expenses must go up in direct proportion to changes in the volume of activity.) 2. Calculate the break-even point in units and dollars. (Hint: First use the high-low method illustrated in Chapter 4 to separate costs into their fixed and variable components.) 3. Prepare a break-even chart. 4. Prepare a contribution income statement, similar in format to the statement appearing on page 540, assuming sales of 5,000 units. 5. Recompute the break-even point in units, assuming that variable costs increase by 20% and fixed costs are reduced by 50,000.
Moleno Company produces a single product and uses a standard cost system. The normal production volume is 120,000 units; each unit requires 5 direct labor hours at standard. Overhead is applied on the basis of direct labor hours. The budgeted overhead for the coming year is as follows: At normal volume. During the year, Moleno produced 118,600 units, worked 592,300 direct labor hours, and incurred actual fixed overhead costs of 2,150,400 and actual variable overhead costs of 1,422,800. Required: 1. Calculate the standard fixed overhead rate and the standard variable overhead rate. 2. Compute the applied fixed overhead and the applied variable overhead. What is the total fixed overhead variance? Total variable overhead variance? 3. CONCEPTUAL CONNECTION Break down the total fixed overhead variance into a spending variance and a volume variance. Discuss the significance of each. 4. CONCEPTUAL CONNECTION Compute the variable overhead spending and efficiency variances. Discuss the significance of each.
A manufacturer planned to use $78 of variable overhead per unit produced, but in the most recent period, it actually used $76 of variable overhead per unit produced. During this same period, the company planned to produce 500 units but actually produced 540 units. What is the variable overhead spending variance?
Aretha Company provided the following information: Standard variable overhead rate (SVOR) per direct labor hour $4.70 Actual variable overhead costs $335,750 Actual direct labor hours worked (AH) 69,200 Actual production in units 14,000 Standard hours (SH) allowed for actual units produced 70,000 Required: 1. Calculate the total variable overhead variance. Enter amount as a positive number and select Favorable or Unfavorable.2. Using the formula approach, calculate the variable overhead spending variance. Enter amount as a positive number and select Favorable or Unfavorable. $fill in the blank 11 Unfavorable 3. Using the formula approach, calculate the variable overhead efficiency variance. Enter amount as a positive number and select Favorable or Unfavorable.
Rainbow Company uses standard cost system for its production process. Rainbow Company applies overhead based on direct labor hours. The following information is available for October Standard: Direct labor hours per unit 2.20 variable overhead per hour P2.50 fixed overhead per hour (based on 11,990 DLHs) 3.00 Actual: Units produced 4,400 Direct labor hours 8,800 Variable Overhead P29,950 Fixed Overhead 42,300 1. What is the variable overhead spending variance? 2. Using the three-variance approach, what is the efficiency variance?Required to answer. Single choice. 3. Using the two-variance approach, what is the controllable variance?
Mosaic Company applies overhead using machine hours and reports the following information. Compute the total variable overhead cost variance and classify it as favorable or unfavorable. Actual machine hours used . 4,700 hours Standard machine hours (for actual production) 5,000 hours Actual variable overhead rate per hour $4.15 Standard variable overhead rate per hour . $4.00