Bookmark Lane Company manufactures a single product thatrequires a great deal of hand labor. Overhead cost is applied onthe basis of standard direct labor-hours. Variable manufacturingoverhead should be $5.40 per standard direct labor-hour and fixedmanufacturing overhead should be $2,679,000 per year. The companyâsproduct requires 4 pounds of material that has a standard cost of$11.50 per pound and 1.5 hours of direct labor time that has astandard rate of $13.70 per hour. The company planned to operate ata denominator activity level of 285,000 direct labor-hours and toproduce 190,000 units of product during the most recent year.Actual activity and costs for the year were as follows: Number ofunits produced 228,000 Actual direct labor-hours worked 370,500Actual variable manufacturing overhead cost incurred $ 1,148,550Actual fixed manufacturing overhead cost incurred $ 2,964,000Required: 1. Compute the predetermined overhead rate for the year.Break the rate down into variable and fixed elements. (Round youranswers to 2 decimal places.) 2. Prepare a standard cost card forthe companyâs product. (Round your answers to 2 decimal places.)3a. Compute the standard direct labor-hours allowed for the yearâsproduction. 3b. Complete the following Manufacturing OverheadT-account for the year: 4. Determine the reason for theunderapplied or overapplied overhead from (3) above by computingthe variable overhead rate and efficiency variances and the fixedoverhead budget and volume variances. (Indicate the effect of eachvariance by selecting "F" for favorable, "U" for unfavorable, and"None" for no effect (i.e., zero variance).) Variable overhead ratevariance Variable overhead efficiency variance Fixed overheadbudget variance Fixed overhead volume variance I need the answer toQ4.
Bookmark Lane Company manufactures a single product thatrequires a great deal of hand labor. Overhead cost is applied onthe basis of standard direct labor-hours. Variable manufacturingoverhead should be $5.40 per standard direct labor-hour and fixedmanufacturing overhead should be $2,679,000 per year. The companyâsproduct requires 4 pounds of material that has a standard cost of$11.50 per pound and 1.5 hours of direct labor time that has astandard rate of $13.70 per hour. The company planned to operate ata denominator activity level of 285,000 direct labor-hours and toproduce 190,000 units of product during the most recent year.Actual activity and costs for the year were as follows: Number ofunits produced 228,000 Actual direct labor-hours worked 370,500Actual variable manufacturing overhead cost incurred $ 1,148,550Actual fixed manufacturing overhead cost incurred $ 2,964,000Required: 1. Compute the predetermined overhead rate for the year.Break the rate down into variable and fixed elements. (Round youranswers to 2 decimal places.) 2. Prepare a standard cost card forthe companyâs product. (Round your answers to 2 decimal places.)3a. Compute the standard direct labor-hours allowed for the yearâsproduction. 3b. Complete the following Manufacturing OverheadT-account for the year: 4. Determine the reason for theunderapplied or overapplied overhead from (3) above by computingthe variable overhead rate and efficiency variances and the fixedoverhead budget and volume variances. (Indicate the effect of eachvariance by selecting "F" for favorable, "U" for unfavorable, and"None" for no effect (i.e., zero variance).) Variable overhead ratevariance Variable overhead efficiency variance Fixed overheadbudget variance Fixed overhead volume variance I need the answer toQ4.
Related questions
The following standard costs were developed for one of theJackson Martinez company's products:
Standard Cost Card Per Unit
| Materials: 10 pounds x $8 per pound | $80.00 |
| Direct Labor: 3 hours x $32 per hour | 96.00 |
| Variable manufacturing overhead: $20 per hour | ? |
| Fixed Manufacturing overhead: $X per hour | ? |
| Total standard costs per unit | ? |
The following information is available regarding the company;soperations for the period.
Units produced: 15,000
Materials purchased and used 153,000 pounds @ $7.50 perpound
Direct Labor: 47,000 hours @ $34 per hour
Manufacturing overhead incurred:
Variable: $912,000
Fixed: 2,560,000
Budgeted fixed manufacturing overhead for the period is$2,700,000 and expected capacity for the period is 45,000 directlabor hours.
Required:
a) Calculate the standard fixed manufacturing overhead rate
b) complete the standard cost card per unit for the product
c) calculate the direct material price and quantityvariances
d) calculate the direct labor rate and efficiency variances
e) calculate the variable overhead rate and efficiencyvariances
f) calculate the fixed overhead spendin variance
Requirements
1. Compute the variable manufacturing overhead variances. What do each of these variances tellâ management?
2. Compute the fixed manufacturing overhead variances. What do each of these variances tellâ management?
Standard Price and Volume
| Direct materials (resin). . . . . . . . . . . . . . . . . . . . . . . | 13 pounds per pot at a cost of $4.00 |
| per pound | |
| Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4.0 hours at a cost of $17.00 per hour |
| Standard variable manufacturing | |
| overhead rate. . . . . . . . . . . . . . . . . . . . . . . . . | $7.00 per direct labor hour |
| Budgeted fixed manufacturing overhead. . . . . . . . . | $50,000 |
| Standard fixed MOH rate. . . . . . . . . . . . . . . . . . . | $10.00 per direct labor hour (DLH) |
Actual Results
Country Designs allocated fixed manufacturing overhead to production based standard direct labor hours. Last month, the company reported the following actual results for the production of 1,300 flower pots:
| Direct materials. . . . . . . . . . . . . . . . . . . . . . . . | Purchased 18,510 pounds at a cost of |
| $4.50 per pound; Used 17,810 pounds to | |
| produce 1,300 pots | |
| Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . | Worked 4.5 hours per flower pot (5,850 |
| total DLH) at a cost of $16.00 per hour | |
| Actual variable manufacturing overhead. . . . . | $7.20 per direct labor hour for total |
| actual variable manufacturing overhead | |
| of $42,120 | |
| Actual fixed manufacturing overhead. . . . . . . | $49,500 |
| Standard fixed manufacturing overhead | |
| allocated based on actual production. . . . . . . | $52,000 |
The following standard costs were developed for one of theJackson Martinez company's products:
Standard Cost Card Per Unit
| Materials: 10 pounds x $8 perpound | $80.00 |
| Direct Labor: 3 hours x $32per hour | 96.00 |
| Variable manufacturingoverhead: $20 per hour | ? |
| Fixed Manufacturing overhead:$X per hour | ? |
| Total standard costs perunit | ? |
The following information is available regarding the company;soperations for the period.
Units produced: 15,000
Materials purchased and used 153,000 pounds @ $7.50 perpound
Direct Labor: 47,000 hours @ $34 per hour
Manufacturing overhead incurred:
Variable: $912,000
Fixed: 2,560,000
Budgeted fixed manufacturing overhead for the period is$2,700,000 and expected capacity for the period is 45,000 directlabor hours.
Required:
a) Calculate the standard fixed manufacturing overhead rate
b) complete the standard cost card per unit for the product
c) calculate the direct material price and quantityvariances
d) calculate the direct labor rate and efficiency variances
e) calculate the variable overhead rate and efficiencyvariances
f) calculate the fixed overhead spendin variance
