Littleton Manufacturing uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine-hours.At standard,each unit of product requires one machine-hour to complete.The standard variable overhead is $1.80 per machine-hour and $432,000 per year.The denominator level of activity is 120,000 machine-hours,or 120,000 units.Actual data for the year were as follows: Required:
a.What are the predetermined variable and fixed manufacturing overhead rates?
b.Compute the variable overhead rate and efficiency variances.
c.Compute the fixed manufacturing overhead budget and volume variances.

Question

Littleton Manufacturing uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine-hours.At standard,each unit of product requires one machine-hour to complete.The standard variable overhead is $1.80 per machine-hour and $432,000 per year.The denominator level of activity is 120,000 machine-hours,or 120,000 units.Actual data for the year were as follows:  Required:
a.What are the predetermined variable and fixed manufacturing overhead rates?
b.Compute the variable overhead rate and efficiency variances.
c.Compute the fixed manufacturing overhead budget and volume variances.

Quizplus · Accepted Answer

The Answer of Littleton Manufacturing uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine-hours.At standard,each unit of product requires one machine-hour to complete.The standard variable overhead is $1.80 per machine-hour and $432,000 per year.The denominator level of activity is 120,000 machine-hours,or 120,000 units.Actual data for the year were as follows:  Required:
a.What are the predetermined variable and fixed manufacturing overhead rates?
b.Compute the variable overhead rate and efficiency variances.
c.Compute the fixed manufacturing overhead budget and volume variances.

Littleton Manufacturing Uses a Standard Cost System in Which Manufacturing