Main Company Problems
Not what you're looking for?
Main Company 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:
Direct materials, 5 feet at $4.00 per foot......................... $20.00
Direct labor, 2.0 DLHs at $10.00 per DLH......................... 20.00
Variable overhead, 3.0 DLHs at $2.00 per DLH............... 6.00
Fixed overhead, 3.0 DLHs at $8.00 per DLH................... 24.00
$70.00
Last year, the company produced 6,000 units of product using 17,000 direct labor-hours. The actual total fixed overhead cost for the year was $140,000 and the volume variance was $12,000, favorable.
Required:
a. Compute the total fixed overhead cost that was originally budgeted.
b. Compute the denominator activity figure that the company used in computing predetermined overhead rates
Purchase this Solution
Solution Summary
This solution gives you a detailed discussion on Main Company problems
Solution Preview
STEP 1
We use the figures to compute (b) first.
We know that:
Volume variance = favorable units of production X fixed overhead.
Or 12,000 = favorable units of production X $24
So, the favorable units of production is ...
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Basics of corporate finance
These questions will test you on your knowledge of finance.
Operations Management
This quiz tests a student's knowledge about Operations Management
Introduction to Finance
This quiz test introductory finance topics.
Lean your Process
This quiz will help you understand the basic concepts of Lean.