The Sanibel Corporation produces an industrial chemical. They use a standard cost system and apply MOH based
Question:
The Sanibel Corporation produces an industrial chemical. They use a standard cost system and apply MOH based on DLH.
- At the beginning of 2007, the company had the following information:
- Expected Overhead - Variable $108,000
Expected Overhead - Fixed $216,000
DM per Unit 10 Pounds
Cost of DM $1.60 Per Pound
DLH per Unit 0.75 DLH
Cost of DL $18.00 Per DLH
Expected production 72,000 Units
Actual Information for 2005 was as follows:
Actual production 70,000 Units
Quantity of DM purchased 744,000 Pounds
Cost of DM $1.50 Per Pound
DM used in production 736,000 Pounds
Actual DLH 56,000 DLH
Cost of DL $1,002,400
Actual Fixed Overhead $214,000
Actual Variable Overhead $175,400
QUESTIONS:
DM
What is the DM Price variance?
What is the DM Usage variance?
DL
What is the total DL variance?
What is the DL Rate Variance?
What is the DL Usage Variance?
Variable MOH
How much variable MOH was applied to WIP?
What is the variable overhead spending variance?
What is the variable overhead efficiency variance?
Fixed OH
How much fixed MOH was applied to WIP?
What is the fixed overhead spending variance?
What is the fixed overhead volume variance?
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones