Purchase Solution

Predetermined overhead variance, applied, unit cost

Not what you're looking for?

Ask Custom Question

7. Blue Company applies overhead based on direct labor hours. At the beginning of the year, Blue estimates overhead to be $480,000, Machine hours to be 120,000, and Direct Labor to be 80,000. During January, Blue has 6700 direct labor hours and 11000 machine hours.

a. What is the predetermined overhead rate?
1. $6 per direct labor hour
2. $40,200
3. $4 per machine hour
4. $44,000
5. none of the above

b. What is the amount of overhead applied for January?

c. If the actual overhead for January is $41,000, what is the overhead variance and is it overapplied or underapplied?

8. Brown has applied overhead of $73000 and actual overhead of 87600 for the month of November. It applies overhead based on direct labor hours and those equaled 14600 in November. Overhead for the year was estimated to be $900,000. How many direct labor hours were estimated for the year.

a. 175200
b. 180,000
c. $5
d. 150,000
e. $6

9. At the beginning of the year, Mona Inc estimated that overhead would be $540,000 and direct labor hours would be 180,000. At the end of the year, actual overhead was $616,000 and there were actually 205,200 direct labor hours.

a. What is the overhead variance?

b. What is the predetermined overhead rate?

10. Sanders Manufacturing has the following amounts listed before reconciling the overhead variance.

Estimated overhead $760,000
Applied overhead $756,000
Actual Overhead $740,000
Cost of goods sold $935,000

Assuming that any overhead variance is immaterial, calculate the adjusted Cost of Goods Sold after adjusting for the overhead variance.

a. $951,000
b. $919,000
c. $939,000
d. $955,000
e. $915,000

11. On February 1, Job 12 had a beginning balance of $200. During February, direct materials of $500 and direct labor of $200 were added to the job. Overhead is applied to production at a rate of 55% of direct labor. There are 5 units in Job 12.

What is the unit cost?
a. $22
b. $20
c. $28
d. $50.54
e. none of these

12. Kratzer Company designs and builds fire trucks. During May it had applied overhead of $105,000. Overhead is applied at the rate of 70% of direct labor cost. Direct labor wages average $10 per hour.

How many direct labor hours did Kratzer Company have for the month of May?
a. 15,000
b. 10,500
c. 1,500,000
d. 4,500
e. none of these

Purchase this Solution
Solution Summary

This post has multiple queries. It shows how to calculate the predetermined overhead rate, overhead variance, applied, direct labor hours estimated and variance, unit cost

Solution Preview

7. Blue Company applies overhead based on direct labor hours. At the beginning of the year, Blue estimates overhead to be $480,000, Machine hours to be 120,000, and Direct Labor to be 80,000. During January, Blue has 6700 direct labor hours and 11000 machine hours.

a. What is the predetermined overhead rate?
predetermined overhead rate = 480000/80000=$6.00 per direct labor hour
Answer: 1. $6 per direct labor hour

b. What is the amount of overhead applied for January?
=$6*6700=$40,200

c. If the actual overhead for January is $41,000, what is the overhead variance and is it overapplied or underapplied?
Overhead variance = Actual overhead costs - overhead costs applied based on standard hours allowed
=41000-40200=800
Since it is positive value, the overhead is under applied.

8. Brown has ...

Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

View More Free Quizzes
Related BrainMass Solutions

  • Question about Overhead Calculation

    is applied based on standard hours Overhead applied = Predetermined overhead rate X Standard Hours Predetermined overhead rate = $8 per DLH Standard labor hours = 90,000 putters X 1 DLH per unit = 90,000 DLH Overhead applied = 90,000X8 = $720,000

  • Explanation to "Flexible Budget" question

    Total overhead cost = Actual total variable overhead cost +Actual total fixed overhead cost = 120,000 + 380,000 = 500,000 Overhead cost per unit produced = Total overhead cost/actual units produced = 500,000/20,000 = 25/unit

  • Cost accounting: budgeted amount, variances, overhead rate

    Predetermined variable overhead rate $ Predetermined fixed overhead rate $ Compute the applied overhead for Levitt for the year. $ Compute the total overhead variance.

  • Total overhead variance

    Total overhead variance = Actual overhead - Applied overhead Actual overhead = 17,800+10,800=28,600 Overhead applied = Predetermined overhead rate X Standard Hours Predetermined overhead rate = $10 per hour Standard hours = 1,500 units X 2 hours per

  • Variance calculations

    The predetermined overhead rate, including both fixed and variable components is $4 per direct labor-hour. The standards call for direct labor-hours per unit of output produced.

  • Compute the total, fixed, and variable predetermined manufacturing overhead rates.

    Fixed Manufacturing Overhead Rate = 400 x $1.3 = $520 Unfavorable since we have an Idle Capacity Total Manufacturing Overhead Cost Variance = $1,350 + $520 = $1,870 Unfavorable c.

  • Arco Inc. fixed overhead volume variance

    Fixed Overhead Volume Variance 31. Corresponds to CLO 8(b) Arco Inc.'s fixed overhead budget is $400,000; the standard fixed overhead rate is $5 per direct labor hour or $10 per unit of product.

  • Variances: Variable and Fixed

    applied Fixed overhead applied = Standard hours allowed * Predetermined fixed overhead rate Predetermined fixed overhead rate = Budgeted fixed overhead/Planned activity in hours Predetermined fixed overhead rate = $300,000/(25,000 * 2) = $6/direct

  • Kohler Clothiers, Crede Manufacturing, Mo Vaughn: variances,

    If total budgeted manufacturing overhead was $327,600 at normal capacity, what was the predetermined overhead rate per direct labor hour? G. What was the standard cost per unit of product? (g) $29.967 H.

View More Related Solutions