Tage Inc. employs a standard costing system. The company has capacity to produce 300,000 units per...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Tage Inc. employs a standard costing system. The company has capacity to produce 300,000 units per year and applies overhead is applied on the basis of direct labour hours. The standard costing system allows two direct labour hours per unit produced. For 2021, the company budgeted variable overhead to be $2,280,000 and fixed overhead to be $900,000. Actual results for the year are as follows: 280,000 Units produced Direct labour 570,000 hours Variable overhead $2,337,000 $872,000 Fixed overhead Required: (A) Compute the predetermined variable overhead rate (SVOR). (B) Compute the variable overhead spending variance and the variable overhead efficiency variance and indicate whether each variance is favourable or unfavourable. (C) Compute the predetermined fixed overhead rate (SFOR). (D) Compute the applied fixed overhead. [Note, you will need to use the Standard Hours in your calculation.] (E) Compute the fixed overhead spending variance and the fixed overhead volume variance. (F) How do the variable overhead variances and the fixed overhead variances help managers (i.e., what do the variances tell us)? Tage Inc. employs a standard costing system. The company has capacity to produce 300,000 units per year and applies overhead is applied on the basis of direct labour hours. The standard costing system allows two direct labour hours per unit produced. For 2021, the company budgeted variable overhead to be $2,280,000 and fixed overhead to be $900,000. Actual results for the year are as follows: 280,000 Units produced Direct labour 570,000 hours Variable overhead $2,337,000 $872,000 Fixed overhead Required: (A) Compute the predetermined variable overhead rate (SVOR). (B) Compute the variable overhead spending variance and the variable overhead efficiency variance and indicate whether each variance is favourable or unfavourable. (C) Compute the predetermined fixed overhead rate (SFOR). (D) Compute the applied fixed overhead. [Note, you will need to use the Standard Hours in your calculation.] (E) Compute the fixed overhead spending variance and the fixed overhead volume variance. (F) How do the variable overhead variances and the fixed overhead variances help managers (i.e., what do the variances tell us)?
Expert Answer:
Answer rating: 100% (QA)
Budgeted lbr hurs Budgeted units f rdutin Stndrd lbr hurs er unit 3000002600000 redetermined vrible ... View the full answer
Related Book For
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
Posted Date:
Students also viewed these accounting questions
-
The Sussiny Corporation uses a standard costing system in its process cost facility, which manufactures a product called Wikum. Material A is added at the beginning of the process and Material B is...
-
A company operates a standard costing system and prepares monthly financial statements. All materials purchased during February were used during that month. After all transactions for February were...
-
The Quality Cabinet Company uses a standard costing system and produced 2,000 cabinets during May. The standard cost of wood is $22 per linear foot, and the standard quantity for each cabinet is 27...
-
Aussie Infonautics, Inc., produces handheld Windows CE¢-compatible organizers. Aussie Infonautics markets three different handheld models. PalmPro is a soupedup version for the executive on the...
-
Locate and read the article listed below and answer the following questions. Bowlin, K. 2011. Risk-Based Auditing, Strategic Prompts, and Auditor Sensitivity to the Strategic Risk of Fraud. The...
-
Stephen So, the financial manager for Cathay Pacific In corporation, wishes to evaluate three prospective investments: A, B, and C. Stephen will evaluate each of these investments to decide whether...
-
In subharmonic oscillations, the natural frequency \(\left(\omega_{n} ight)\) and the forcing frequency \((\omega)\) are related as a. \(\omega_{n}=\omega\) b. \(\omega_{n}=n \omega ; n=2,3,4,...
-
Jupiter Company sells goods on January 1 that have a cost of $500,000 to Danone Inc. for $700,000, with payment due in 1 year. The cash price for these goods is $610,000, with payment due in 30 days....
-
Cash contribution of 4,000 to the Accounting Society (a charity) Purchase of art object at an Accounting Society Charitable event for $1,200 (FMV $800) Donation of 3-year-old clothing (basis 800; FMV...
-
5-1. A manufacturer of mountain bike will design and implement an automated system for welding bicycle frames. All works related to this project will be conducted within the company without any...
-
Assume you have a foreign currency contract expiring in 3 months. The current price of the future contract is 0.82. Assuming that you have the current exchange rate between domestic currency and...
-
Need some help or guidance to modify the getDouble() method in the console class so it can remove any $ or % signs from the string that is put in by the user. FutureValueApp Code: import...
-
Create the AllDayEvent class, a subclass of the Event class to help you store an AllDayEvent. This will keep the Event class functionalities, with one exception: The constructor will receive the...
-
Newhard Company assigns overhead cost to jobs on the basis of 1 1 2 % of direct labor cost. The job cost sheet for Job 3 1 3 includes $ 2 9 , 8 1 6 in direct materials cost and $ 1 0 , 7 0 0 in...
-
Please make a Creature class that has: Private fields for: (string) name, (string) description, (int) endurance, (string) filename, an array of phrases (size of at least 3) that the creature might...
-
2. Your firm processes 50,000 checks each year with an average face.value of $50 per check. Col- lecting on these checks requires two days of mail float, three days of processing float, and one day...
-
b. To avoid double counting in measuring national income, statisticians use the concept of value added output minus the costs of that it purchases from other firms. final goods intermediate goods...
-
Frontland Advertising creates, plans, and handles advertising campaigns in a three-state area. Recently, Frontland had to replace an inexperienced office worker in charge of bookkeeping because of...
-
Identify why RPE would be used at the company level.
-
The Neon Manufacturing Company is a joint venture between Australian and Chinese firms with an assembly plant located in Beijing. The companys managers expected to produce 20 000 units of product in...
-
Langley uses a job costing system. At the beginning of June, two orders were in process as follows: There was no inventory in finished goods on 1 June. During June, orders numbered 106 to 120 were...
-
With reference to Exercise 11.65, test the null hypothesis \(\beta=1.5\) against the alternative hypothesis \(\beta>1.5\) at the 0.01 level of significance. Data From Exercise 11.65 11.65 The data...
-
The data below pertains to the number of hours a laptop has been charged for and the number of hours of backup provided by the battery. (a) Use the first set of expressions on page 330, involving...
-
With reference to Exercise 11.65, construct a \(99 \%\) confidence interval for \(\alpha\).
Study smarter with the SolutionInn App