Starling Company, which allocates overhead to production on the basis of machine hours, reported the following data
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Question:
Starling Company, which allocates overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 12,000
Actual fixed overhead incurred: $700,000
Actual machine hours worked: 60,000
Budgeted fixed overhead: $720,000 (numerator)
Budgeted level of machine-hour activity: 50,000 (denominator)
Starling estimates that it takes four hours to manufacture a completed unit.
Compute all standards & variances. You must compute the FOH rate.
Prepare all journal entries using standard costing.
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