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slega [8]
3 years ago
13

During the year, Octagon produced 8,000 units, used 24,000 direct labor hours, and incurred variable overhead of $120,000. Budge

ted variable overhead for the year was $90,000. The hours allowed per unit are 2. The standard variable overhead rate is $3.00 per direct labor hour. The variable overhead spending variance is:
Business
1 answer:
Natali5045456 [20]3 years ago
7 0

Answer:

Manufacturing overhead rate(spending) variance= $24,000 favorable

Explanation:

Giving the following information:

Actual direct labor hours= 24,000

Octagon produced 8,000 units and incurred a variable overhead of $120,000.

The hours allowed per unit are 2. The standard variable overhead rate is $3.00 per direct labor hour.

To calculate the variable overhead spending variance, we need to use the following formula:

Manufacturing overhead rate(spending) variance= (standard rate - actual rate)* actual quantity

Actual rate= 120,000/24,000= 5

Manufacturing overhead rate variance=  (6 - 5)*24,000

Manufacturing overhead rate variance= $24,000 favorable

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Madison Corporation sells three products (M, N, and O) in the following sales mix: 3:1:2. Unit price and cost data are: M N O Un
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Answer:

Products    Selling price   Unit variable cost   Contribution per unit

                        $                           $                             $

M                      7                           3                             4

N                       6                          2                             4

O                       6                          3                             3

                        19                          8                            11

Break-even point in composite units

= <u>Total fixed cost</u>

  Contribution per unit

= <u>$340,000</u>

         $11

= 30,909 units

Break-even point for the current sales mix

M    3/6 x 30,909 units = 15,455 units

N     1/6 x 30,909 units = 5,151 units

O     2/6 x 30,909 units = 10,303 units

Explanation:

In this case, we need to calculate contribution per unit of each product by deducting the unit variable cost of each product from their respective selling prices. Then, we will obtain the break-even point in composite units by dividing the total fixed cost by overall contribution per unit.

Then, we will determine the break-even point for the current sales mix by multiplying the proportion of each product in the sales mix by the break-even point in composite units.

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5 0
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Answer:

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7 0
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