E11-12 Byrd
Company produces one product, a putter called GO-Putter. Byrd uses a standard
cost system and determines that it should take one hour of direct labor to
produce one GO-Putter. The normal production capacity for this putter is
100,000 units per year.
The
total budgeted overhead at normal capacity is $850,000 comprised of $250,000 of
variable costs and $600,000 of fixed costs. Byrd applies overhead on the basis
of direct labor hours.
During
the current year, Byrd produced 95,000 putters, worked 94,000 direct labor
hours, and incurred variable overhead costs of $256,000 and fixed overhead
costs of $600,000.
Instructions
(a) Compute the predetermined variable overhead rate and the predetermined fixed overhead rate.
(a) Compute the predetermined variable overhead rate and the predetermined fixed overhead rate.
(b)
Compute the applied overhead for Byrd for the year.
(c)
Compute the total overhead variance.
TUTORIAL PREVIEW
(a)
Overhead Budget ÷ Direct Labor Hours = Predetermined
Overhead Rate
(at normal capacity) (at
normal capacity)
File name: E11-12 Byrd Company.docx File
type: .docx PRICE: $6
