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Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 pounds @ $3.20 per pound) Direct labor (10 hours @ $8.30 per DLH) $ 64.00 83.00 Variable overhead (10 hours @ $4.70 per DLH) Fixed overhead (10 hours @ $2.30 per DLH) 47.00 23.00 Standard cost per unit $ 217.00 The $7.00 ($4.70 + $2.30) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 34,200 units, which is 60% of the factory's capacity of 57,000 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 Operating Levels (% of capacity) 55% 60% 65% $ 1,411,000 858,050 $ 2,269,050 31,350 313,500 34,200 342,000 $ 1,473,450 $ 1,607,400 786,600 37,050 370,500 $ 1,741,350 786,600 During the current month, the company operated at 55% of capacity, direct labor of 295,000 hours were used, and the following actual overhead costs were incurred. 786,600 $ 2,260,050 $ 2,394,000 $ 2,527,950 Compute the total variable overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by electing favorable, unfavorable, or no variance.)

Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 pounds @ $3.20 per pound) Direct labor (10 hours @ $8.30 per DLH) $ 64.00 83.00 Variable overhead (10 hours @ $4.70 per DLH) Fixed overhead (10 hours @ $2.30 per DLH) 47.00 23.00 Standard cost per unit $ 217.00 The $7.00 ($4.70 + $2.30) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 34,200 units, which is 60% of the factory's capacity of 57,000 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 Operating Levels (% of capacity) 55% 60% 65% $ 1,411,000 858,050 $ 2,269,050 31,350 313,500 34,200 342,000 $ 1,473,450 $ 1,607,400 786,600 37,050 370,500 $ 1,741,350 786,600 During the current month, the company operated at 55% of capacity, direct labor of 295,000 hours were used, and the following actual overhead costs were incurred. 786,600 $ 2,260,050 $ 2,394,000 $ 2,527,950 Compute the total variable overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by electing favorable, unfavorable, or no variance.)

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 18P: Kamen Manufacturing Co. estimates the following labor and overhead costs for the...
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Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 pounds @ $3.20 per pound) Direct labor (10 hours @ $8.30 per DLH) $ 64.00 83.00 Variable overhead (10 hours @ $4.70 per DLH) Fixed overhead (10 hours @ $2.30 per DLH) 47.00 23.00 Standard cost per unit $ 217.00 The $7.00 ($4.70 + $2.30) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 34,200 units, which is 60% of the factory's capacity of 57,000 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 Operating Levels (% of capacity) 55% 60% 65% $ 1,411,000 858,050 $ 2,269,050 31,350 313,500 34,200 342,000 37,050 370,500 $ 1,473,450 $ 1,607,400 $ 786,600 786,600 $ 2,260,050 $ 2,394,000 $ 2,527,950 ,741,350 786,600 During the current month, the company operated at 55% of capacity, direct labor of 295,000 hours were used, and the following actual overhead costs were incurred. . Compute the total variable overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by electing favorable, unfavorable, or no variance.) 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by electing favorable, unfavorable, or no variance.)
Transcribed Image Text:Sedona Company set the following standard costs for one unit of its product for this year. Direct material (20 pounds @ $3.20 per pound) Direct labor (10 hours @ $8.30 per DLH) $ 64.00 83.00 Variable overhead (10 hours @ $4.70 per DLH) Fixed overhead (10 hours @ $2.30 per DLH) 47.00 23.00 Standard cost per unit $ 217.00 The $7.00 ($4.70 + $2.30) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 34,200 units, which is 60% of the factory's capacity of 57,000 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 Operating Levels (% of capacity) 55% 60% 65% $ 1,411,000 858,050 $ 2,269,050 31,350 313,500 34,200 342,000 37,050 370,500 $ 1,473,450 $ 1,607,400 $ 786,600 786,600 $ 2,260,050 $ 2,394,000 $ 2,527,950 ,741,350 786,600 During the current month, the company operated at 55% of capacity, direct labor of 295,000 hours were used, and the following actual overhead costs were incurred. . Compute the total variable overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by electing favorable, unfavorable, or no variance.) 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by electing favorable, unfavorable, or no variance.)
Standard Direct Labor Hours Overhead Rate Variable overhead variance $ Fixed overhead variance 4.70 2.30 Standard Direct Labor Hours -At 55% of Operating Capacity........ Standard Overhead Applied Actual Overhead 858,050 Overhead Variance Favorable/Unfavorable
Transcribed Image Text:Standard Direct Labor Hours Overhead Rate Variable overhead variance $ Fixed overhead variance 4.70 2.30 Standard Direct Labor Hours -At 55% of Operating Capacity........ Standard Overhead Applied Actual Overhead 858,050 Overhead Variance Favorable/Unfavorable
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