Required information [The following information applies to the questions displayed below.] Sedona Company set the following standard costs for one unit of its product for this year. Direct material (15 pounds @ $3.20 per pound) Direct labor (10 hours @ $9.50 per DLH) Variable overhead (10 hours @ $4.60 per DLH) Fixed overhead (10 hours @ $2.20 per DLH) Standard cost per unit The $6.80 ($4.60 + $2.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 42,000 units, which is 75% of the factory's capacity of 56,000 units per month. The following monthly flexible budget information is available. Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhead Variable overhead Fixed overhead Total overhead Actual variable overhead Actual fixed overhead Actual total overhead AH = Actual Hours SH = Standard Hours AVR = Actual Variable Rate SVR Standard Variable Rate $ 1,716,000 1,015, 200 $ 2,731,200 $48.00 95.00 46.00 22.00 $ 211.00 80% Operating Levels (% of capacity) 70% 75% 39,200 42,000 392,000 420,000 44,800 448,000 $ 1,803, 200 924,000 $ 2,727,200 During the current month, the company operated at 70% of capacity, direct labor of 371,000 hours were used, and the following actual overhead costs were incurred. 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances. 3. Compute the controllable variance. $ 1,932,000 924,000 $ 2,856,000 $ 2,060,800 924,000 $ 2,984,800
Required information [The following information applies to the questions displayed below.] Sedona Company set the following standard costs for one unit of its product for this year. Direct material (15 pounds @ $3.20 per pound) Direct labor (10 hours @ $9.50 per DLH) Variable overhead (10 hours @ $4.60 per DLH) Fixed overhead (10 hours @ $2.20 per DLH) Standard cost per unit The $6.80 ($4.60 + $2.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 42,000 units, which is 75% of the factory's capacity of 56,000 units per month. The following monthly flexible budget information is available. Flexible Budget Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhead Variable overhead Fixed overhead Total overhead Actual variable overhead Actual fixed overhead Actual total overhead AH = Actual Hours SH = Standard Hours AVR = Actual Variable Rate SVR Standard Variable Rate $ 1,716,000 1,015, 200 $ 2,731,200 $48.00 95.00 46.00 22.00 $ 211.00 80% Operating Levels (% of capacity) 70% 75% 39,200 42,000 392,000 420,000 44,800 448,000 $ 1,803, 200 924,000 $ 2,727,200 During the current month, the company operated at 70% of capacity, direct labor of 371,000 hours were used, and the following actual overhead costs were incurred. 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances. 3. Compute the controllable variance. $ 1,932,000 924,000 $ 2,856,000 $ 2,060,800 924,000 $ 2,984,800
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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Required information
[The following information applies to the questions displayed below.]
Sedona Company set the following standard costs for one unit of its product for this year.
Direct material (15 pounds @ $3.20 per pound)
Direct labor (10 hours @ $9.50 per DLH)
Variable overhead (10 hours @ $4.60 per DLH)
Fixed overhead (10 hours @ $2.20 per DLH)
Standard cost per unit
The $6.80 ($4.60 + $2.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 42,000
units, which is 75% of the factory's capacity of 56,000 units per month. The following monthly flexible budget information
is available.
Flexible Budget
Budgeted production (units)
Budgeted direct labor (standard hours)
Budgeted overhead
Variable overhead
Fixed overhead
Total overhead
Actual variable overhead
Actual fixed overhead
Actual total overhead
AH = Actual Hours
SH = Standard Hours
AVR = Actual Variable Rate
SVR = Standard Variable Rate
$ 1,716,000
1,015, 200
$ 2,731, 200
$48.00
95.00
46.00
22.00
$ 211.00
Operating Levels (% of capacity)
70%
75%
80%
39, 200
392,000
44,800
448,000
$ 1,803, 200
924,000
$ 2,727,200
During the current month, the company operated at 70% of capacity, direct labor of 371,000 hours were used, and the
following actual overhead costs were incurred.
1. Compute the variable overhead spending and efficiency variances.
2. Compute the fixed overhead spending and volume variances.
3. Compute the controllable variance.
42,000
420,000
$ 1,932,000
924,000
$ 2,856,000
$ 2,060,800
924,000
$ 2,984,800](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F24de9d49-6070-4d88-ab58-a37c20172dbc%2Fc14e334a-38c3-47ce-9ceb-372e5e2635d0%2Ft48tei9_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Sedona Company set the following standard costs for one unit of its product for this year.
Direct material (15 pounds @ $3.20 per pound)
Direct labor (10 hours @ $9.50 per DLH)
Variable overhead (10 hours @ $4.60 per DLH)
Fixed overhead (10 hours @ $2.20 per DLH)
Standard cost per unit
The $6.80 ($4.60 + $2.20) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 42,000
units, which is 75% of the factory's capacity of 56,000 units per month. The following monthly flexible budget information
is available.
Flexible Budget
Budgeted production (units)
Budgeted direct labor (standard hours)
Budgeted overhead
Variable overhead
Fixed overhead
Total overhead
Actual variable overhead
Actual fixed overhead
Actual total overhead
AH = Actual Hours
SH = Standard Hours
AVR = Actual Variable Rate
SVR = Standard Variable Rate
$ 1,716,000
1,015, 200
$ 2,731, 200
$48.00
95.00
46.00
22.00
$ 211.00
Operating Levels (% of capacity)
70%
75%
80%
39, 200
392,000
44,800
448,000
$ 1,803, 200
924,000
$ 2,727,200
During the current month, the company operated at 70% of capacity, direct labor of 371,000 hours were used, and the
following actual overhead costs were incurred.
1. Compute the variable overhead spending and efficiency variances.
2. Compute the fixed overhead spending and volume variances.
3. Compute the controllable variance.
42,000
420,000
$ 1,932,000
924,000
$ 2,856,000
$ 2,060,800
924,000
$ 2,984,800
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