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 (DLHs).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 (DLHs).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 (DLHs).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