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    Operations, Costs of Goods and Overhead Variance

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    1. Information about the production and sales of its only product during its first month of operations:

    Sales ($225 per unit) $405,000
    Direct materials used $176,000
    Direct labor $100,000
    Variable factory overhead $44,000
    Fixed factory overhead $80,000
    Variable selling and administrative expenses $20,000
    Fixed selling and administrative expenses $10,000

    Ending inventories:

    Direct materials -0-
    WIP -0-
    Finished goods 200 units

    The cost of goods sold under variable costing is_____.

    a. $320,000
    b. $360,000
    c. $288,000
    d. $272,000

    2. Company's overhead cost information is given below:

    Standard applied overhead $210,000

    Budgeted overhead based on standard machine hours allowed $230,000

    Budgeted overhead based on actual machine hours used $215,000

    Actual overhead $200,000

    a. Compute the total overhead variance.

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    https://brainmass.com/business/business-management/operations-costs-goods-overhead-variance-249929

    Solution Preview

    1. Information about the production and sales of its only product during its first month of operations:

    Sales ($225 per unit) $405,000
    Direct materials used $176,000
    Direct labor $100,000
    Variable factory overhead $44,000
    Fixed factory overhead $80,000
    Variable selling and administrative expenses $20,000
    Fixed selling and administrative expenses $10,000

    Ending ...

    Solution Summary

    This solution shows step-by-step calculations to determine the cost of goods sold under variable costing and the total overhead variance.

    $2.19

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