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E11-12
Byrd Company produces one product, a putter called GO-Putter. Byrd
uses a standard cost system and determines that it should take one
hour of direct labor to produce one GO-Putter. The normal production
capacity for this putter is 100,000 units per year. The total budgeted
overhead at normal capacity is $850,000 comprised of $250,000 of
variable costs and $600,000 of fixed costs. Byrd applies overhead on
the basis of direct labor hours.
During the current year, Byrd produced 95,000 putters, worked 94,000
direct labor hours, and incurred variable overhead costs of $256,000
and fixed overhead costs of $600,000.
Instructions
a. Compute the predetermined variable overhead rate and the
predetermined fixed overhead rate.
b. Compute the applied overhead for Byrd for the year.
c. Compute the total overhead variance.
P11-2A
Ayala Corporation accumulates the following data relative to jobs
started and finished during the month of June 2017.
Overhead is applied on the basis of standard machine hours. Three
hours of machine time are required for each direct labor hour. The
jobs were sold for $400,000. Selling and administrative expenses were
$40,000. Assume that the amount of raw materials purchased equaled
the amount used.
Instructions