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EXERCISE 10A 2 Fixed Overhead Variances LO4 Lusive Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual

EXERCISE 10A–2 Fixed Overhead Variances [LO4]

Lusive Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

 

Total budgeted fixed overhead cost for the year . . . . . . . . . . . . . . . . . . . .

$400,000

Actual fixed overhead cost for the year. . . . . . . . . . . . . . . . . . . . . . . . . . .

$394,000

Budgeted standard direct labor-hours (denominator level of activity) . . . .

50,000

Actual direct labor-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51,000

Standard direct labor-hours allowed for the actual output . . . . . . . . . . . . .

48,000

 

Required:

1.       Compute the fixed portion of the predetermined overhead rate for the year.

2.       Compute the fixed overhead budget and volume variances.

Jun 28 2020 View more View Less

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