IWI Auto Parts Corporation located in Michigan manufactures auto accessories including floor mats and liners, and car co
Posted: Tue Apr 26, 2022 10:20 am
IWI Auto Parts Corporation located in Michigan manufactures auto
accessories including floor mats and liners, and car covers. IWI's
predetermined variable overhead rate is based on direct
labor-hours.
In the most recent month, 180,000 products were shipped
using 7,700 direct labor-hours. IWI incurred a total of $26,180 in
variable overhead costs.
According to the corporation's standards, 0.03 direct
labor-hours are required to fulfill an order for one
product and the variable overhead rate is $3.45 per direct
labor-hour.
Required:
1. What is the standard labor-hours allowed (SH) to ship 180,000
products to customers?
2. What is the standard variable overhead cost allowed (SH × SR)
to ship 180,000 products to customers?
3. What is the variable overhead spending variance?
4. What is the variable overhead rate variance and the variable
overhead efficiency variance?
accessories including floor mats and liners, and car covers. IWI's
predetermined variable overhead rate is based on direct
labor-hours.
In the most recent month, 180,000 products were shipped
using 7,700 direct labor-hours. IWI incurred a total of $26,180 in
variable overhead costs.
According to the corporation's standards, 0.03 direct
labor-hours are required to fulfill an order for one
product and the variable overhead rate is $3.45 per direct
labor-hour.
Required:
1. What is the standard labor-hours allowed (SH) to ship 180,000
products to customers?
2. What is the standard variable overhead cost allowed (SH × SR)
to ship 180,000 products to customers?
3. What is the variable overhead spending variance?
4. What is the variable overhead rate variance and the variable
overhead efficiency variance?