Eastern Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours. The denominator activity level is 60,000 direct labor-hours, or 300,000 units. A standard cost card for the company's product follows:
Actual data for the year follow:
Required:
a.Compute the variable overhead rate and efficiency variances.
b. Compute the fixed manufacturing overhead budget and volume variances.

Question

Eastern Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours. The denominator activity level is 60,000 direct labor-hours, or 300,000 units. A standard cost card for the company's product follows:
  Actual data for the year follow:
  Required:
a.Compute the variable overhead rate and efficiency variances.
b. Compute the fixed manufacturing overhead budget and volume variances.

Quizplus · Accepted Answer

The Answer of Eastern Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours. The denominator activity level is 60,000 direct labor-hours, or 300,000 units. A standard cost card for the company's product follows:
  Actual data for the year follow:
  Required:
a.Compute the variable overhead rate and efficiency variances.
b. Compute the fixed manufacturing overhead budget and volume variances.

Eastern Company Uses a Standard Cost System in Which Manufacturing