Predetermined Overhead Rate, Applied Overhead, Unit Cost Ripley, Inc., costs products using a normal costing system. The following data are available for last year: Budgeted: Overhead $285,600 Machine hours 84,000 Direct labor hours 10,200 Actual: Overhead $285,000 Machine hours 82,200 Direct labor hours 9,930 Prime cost $1,050,000 Number of units 150,000 Overhead is applied on the basis of direct labor hours.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
-
Predetermined
Overhead Rate, Applied Overhead, Unit CostRipley, Inc., costs products using a normal costing system. The following data are available for last year:
Budgeted: Overhead $285,600 Machine hours 84,000 Direct labor hours 10,200 Actual: Overhead $285,000 Machine hours 82,200 Direct labor hours 9,930 Prime cost $1,050,000 Number of units 150,000 Overhead is applied on the basis of direct labor hours.
Required:
1. What was the predetermined overhead rate?
$fill in the blank 1 per direct labor hour2. What was the applied overhead for last year?
$fill in the blank 23. Was overhead over- or underapplied, and by how much?
= $fill in the blank 44. What was the total cost per unit produced (carry your answer to four significant digits)?
$fill in the blank 5 per unit
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
