standard costing system and allocates fixed and variable overhead based on direct labor hours. The Ames...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
standard costing system and allocates fixed and variable overhead based on direct labor hours. The Ames Widget Co. makes and sells eight types of widgets. The company unes a For fixed overhead, the company uses practical capacity in the denominator of the overhead rate Practical capacity is 20,000 direct labor hours per year. Following is information about one of the eight types of widgets (the steel widget), and information for the entire factory, for 2013. Badget Actual Production levels: Steel widgets all types of widgets (including steel) Direct labor for steel widgets: wage rate hours per widget $10 per hr. 2 hours 1,000 5,000 Required: A) Calculate the spending variance for fixed overhead for the factory. 10,000 Direct labor hours for all types of widgets (including steel): Total variable overhead (for the entire factory) Total fixed overhead (for the entire factory) $15,000 $10,000 *These amounts apply not only to steel widgets, but to all types of widgets. B) Calculate the volume variance for fixed overhead for the factory. 1,200 4,000 $12 per hr. 1.5 hours 16,000 $18,000 $9,500 C) Recalculate the volume variance for fixed overhead assuming the company uses budgeted production in the denominator of the fixed overhead rate. standard costing system and allocates fixed and variable overhead based on direct labor hours. The Ames Widget Co. makes and sells eight types of widgets. The company unes a For fixed overhead, the company uses practical capacity in the denominator of the overhead rate Practical capacity is 20,000 direct labor hours per year. Following is information about one of the eight types of widgets (the steel widget), and information for the entire factory, for 2013. Badget Actual Production levels: Steel widgets all types of widgets (including steel) Direct labor for steel widgets: wage rate hours per widget $10 per hr. 2 hours 1,000 5,000 Required: A) Calculate the spending variance for fixed overhead for the factory. 10,000 Direct labor hours for all types of widgets (including steel): Total variable overhead (for the entire factory) Total fixed overhead (for the entire factory) $15,000 $10,000 *These amounts apply not only to steel widgets, but to all types of widgets. B) Calculate the volume variance for fixed overhead for the factory. 1,200 4,000 $12 per hr. 1.5 hours 16,000 $18,000 $9,500 C) Recalculate the volume variance for fixed overhead assuming the company uses budgeted production in the denominator of the fixed overhead rate.
Expert Answer:
Answer rating: 100% (QA)
A To calculate the spending variance for fixed overhead for the factory we need to compare the actua... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date:
Students also viewed these accounting questions
-
The following year-end information is taken from the December 31 adjusted trial balance and other records of Leone Company. Advertising expense Depreciation expense-Office equipment Depreciation...
-
summarize this article TITLE Overhead cost pools. By: Lambert III, S.J., Chen, Kung H., Internal Auditor, 00205745, Oct96, Vol. 53, Issue 5 DATA BASE Business Source Complete Internal auditors who...
-
The Thompson Toy Company manufactures toy building block sets for children. Thompson is planning for 2017 by developing a master budget by quarters. Thompsons balance sheet for December 31, 2016,...
-
Westile Company buys plain ceramic tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock...
-
Thetis Mfg. says that its outboard watercraft engine's noise level at 75 percent throttle averages 100 decibels or less from the operator's seating position. A random sample of 8 noise level...
-
On January 1, 2017, Harvee Company had Accounts Receivable of $54,200 and Allowance for Doubtful Accounts of $3,700. Harvee Company prepares financial statements annually. During the year, the...
-
What must be included in a motion for summary judgment?
-
Following are ten cost activities that might be incurred in an organization. (a) Paying a franchise license fee (b) Transferring a production run to the warehouse (c) Setting up a printer to run...
-
a . What are the strengths of real option valuation according to the paper? Describe each. ( 9 ) b . What are the weaknesses and challenges of real option valuation according to the paper? Describe...
-
3. Write a memo Shelby Cobb and Alexis Hinojosa, the two supervisors to whom you report, have asked you to compose a draft memorandum for their joint signatures. Recently there has been a flurry of...
-
Write a paper about Deaf Language Evolution and Developments
-
Blue-Eyed Beauty Supply is the talk of the town. When Elaine started her business, she had no idea it would evolve to be the number one supplier of cosmetology supply in the region. While her...
-
Go to the press releases maintained by the Computer Crime and Intellectual Property Section (CCIPS) of the United States Department of Justice. Start by clicking on the press releases from the last...
-
One of two methods must be used to produce expansion anchors. Method A costs $60000 initially and will have a $10000 salvage value after 3 years. The operating cost with this method will be $24000...
-
Money can earn 6% compounded quarterly. You have saved up $20,000 for your education. What equal payments at the beginning of ea quarter for five years will you be able to receive?
-
Big Pharma Faces an Ethical Dilemma: Should They Keep Selling to Russia? Sanctions and boycotts following the invasion of Ukraine have curtailed the export of nearly every productexcept medicines....
-
For fuel cell trucks operating at high voltage efficiency (high fuel utilization) is more important than operating at maximum power. Describe the region on the polarization curve where you would want...
-
The unadjusted trial balance of Secretarial Services is as follows: SECRETARIAL SERVICES Unadjusted Trial Balance as at 31 December 2017 Account Debit Credit Cash at bank Office supplies Prepaid...
-
Refer to the data in Exercise E3-25, and prepare an adjusted trial balance. In Exercise 25 FIRST CLASS MAIDS COMPANY Unadjusted Trial Balance December 31, 2016 Balance Account Title Debit Credit $...
-
Sea Bound uses three processes to manufacture lifts for personal watercraft: forming a lifts parts from galvanized steel, assembling the lift, and testing the completed lift. The lifts are...
-
The general ledger of Quick Ship at June 30, 2016, the end of the companys fiscal year, includes the following account balances before payroll and adjusting entries. Accounts Payable............$...
-
What is the function of a steering gear?
-
A shaft running at \(1200 \mathrm{rpm}\) is connected to a second shaft by a Hooke's joint. The angle between the axes of the shafts is \(15^{\circ}\). Determine the velocity and acceleration of the...
-
Watt mechanism is capable of generating (a) approximate straight line (b) exact straight line (c) approximate circular path (d) exact circular path.
Study smarter with the SolutionInn App