The Neon Company manufactured 2,500 units during April at a total actual cost of $60,000. Neon uses direct labor hours to allocate fixed and variable overhead. However, while the 2,500 units were being manufactured, the microcomputer containing the cost information for the month broke down. With the computer out of service, the accountant has been unable to complete the variance analysis report. You have been called to help.

Variable Overhead:

Standard cost per unit: 1.2 hours of direct labor at $10 per hour. Actual costs: $26,250 for 2,250 hours

Fixed Overheads:

Planned Production Units: 2,800, Flexible Budget Variance: $200 Favorable 

Prepare the respective journal entries to capture

 a.) Variable and fixed indirect costs applied.

Answer rating: 100% (QA)

a To capture the variable and fixed indirect costs applied we need to calc... View the full answer