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E11-6
Lewis Company's standard labor cost of producing one unit of Product
DD is 4 hours at the rate of $12.00 per hour. During August, 40,600
hours of labor are incurred at a cost of $12.15 per hour to produce
10,000 units of Product DD.
Instructions
a. Compute the total labor variance.
b. Compute the labor price and quantity variances.
c. Repeat (b), assuming the standard is 4.1 hours of direct labor at
$12.25 per hour.
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.