Pierce Corporation uses a standard cost system in which it applies manufacturing overhead to its product on the basis of standard direct labor-hours (DLHs). Below is the standard cost card for the product: Last year, the company produced 6,000 units of product using 17,000 direct labor-hours. The actual total fixed manufacturing overhead cost for the year was $140,000 and the volume variance was $12,000, favorable.
Required:
a. Determine the budgeted amount of total fixed manufacturing overhead cost.
b. Determine the denominator activity figure that the company used in computing predetermined overhead rates.

Question

Pierce Corporation uses a standard cost system in which it applies manufacturing overhead to its product on the basis of standard direct labor-hours (DLHs). Below is the standard cost card for the product:  Last year, the company produced 6,000 units of product using 17,000 direct labor-hours. The actual total fixed manufacturing overhead cost for the year was $140,000 and the volume variance was $12,000, favorable.
Required:
a. Determine the budgeted amount of total fixed manufacturing overhead cost.
b. Determine the denominator activity figure that the company used in computing predetermined overhead rates.

Quizplus · Accepted Answer

The Answer of Pierce Corporation uses a standard cost system in which it applies manufacturing overhead to its product on the basis of standard direct labor-hours (DLHs). Below is the standard cost card for the product:  Last year, the company produced 6,000 units of product using 17,000 direct labor-hours. The actual total fixed manufacturing overhead cost for the year was $140,000 and the volume variance was $12,000, favorable.
Required:
a. Determine the budgeted amount of total fixed manufacturing overhead cost.
b. Determine the denominator activity figure that the company used in computing predetermined overhead rates.

Pierce Corporation Uses a Standard Cost System in Which It