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2 years ago

Highlight four reason that make indirect production superior to direct production

Business

1 answer:

Sunny_sXe [5.5K]2 years ago

8 0

Answer:

The first reason that makes indirect production superior to direct production is the refining of the end product.

The second reason that makes indirect production superior to direct production is the value the produced good acquires.

The third reason that makes indirect production superior to direct production is the durability of the product is longer.

The fourth reason that makes indirect production superior to direct production is the produced good can be employed in many different other products.

Explanation:

The reasons behind this answer are that in the first place the indirect production allows a producer to refine the raw product to a level in which it can be used to obtain more from it. For example, gasoline as a product can provide us more energy than the oil itself. Also, it obtains a bigger value and it can be used for a longer time. So, in other words, indirect production is the refining of raw materials to obtain more from them.

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Variable manufacturing overhead incurred was $245,000. Fixed manufacturing overhead incurred was $373,000. Actual machine-hours

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Before information shows is the correct and complete question.

The Lopez Company use a standard costing in its manufacturing plant for the auto part. The standard cost of particular auto part based on a denominator level of a 4.000 output unit per year. included 6 machine-hours of variable manufacturing overhead at $8 per hour and 6 machine-hours of fixed manufacturing overhead at $15 per hour.

Actual output produced was 4.400 units.

Variable manufacturing overhead incurred was $245.000.

Fixed manufacturing overhead incurred was $373.000.

Actual machine-hours were 28.400.

Prepare the analysis of all variable manufacturing overhead and fixed manufacturing overhead variances.

Additional diagram attached to this question is displayed in the first image below.

Answer:

Explanation:

By using a columnar method, the analysis of all the variance & fixed manufacturing overhead varaince can be computed as follows:

Variable manufacturing overhead analysis:

Actual cost Incurred: ║ Actual input × Budgeted ║ Allocated: Budgeted

Actual input × Actual rate Input for actual output

rate × Budgeted rate

245000 28400×$8.00 = 227200 (4400×6hrs×$8)

= 211,200

17800 U 16800 U

Spending Variance Efficiency Variance

33800 U

Flexible Budget Variance

Hence;

The spending Variance = $17,800 U

Efficiency Variance = $16,000 U

Flexible Budget Varaince = $33800 U

where; F = Favourable & U = Unfavourable

<u>For the fixed Manufacturing Overhead:</u>

Actual cost Incurred: ║ Flexible Budget Lump ║ Allocated: Budgeted

Actual input × Actual sum regardless of the Input for actual output

rate output level × Budgeted rate

373000 4000×6hrs×15 = 360000 (4400×6hrs×$15)

= 396000

13000 U 36000 F

Spending Variance/ Production-Volume

Flexible budgeted variance Variance

23000 F

Over allocated fixed

Overhead

Hence;

The spending Variance = $13000 U

The production Volume Variance = $36,000 F

Over allocated fixed overhead = $23000 F

where; F = Favourable & U = Unfavourable

NOTE: To have a better view of the above computation in a table format, refer to the second and the third diagram in the image below.

8 0

2 years ago

Highlight four reason that make indirect production superior to direct production​

Highlight four reason that make indirect production superior to direct production