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Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 4 DLH per unit. For March, the company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following budget. The company actually operated at 90% capacity (9,000 units) in March and incurred actual total overhead costs of $89,870. Overhead Budget Production in units Budgeted variable overhead Budgeted fixed overhead 80% Operating Levels 8,000 $36,000 $ 51,000 1. Compute the standard overhead rate. Hint Standard allocation base at 80% capacity is 30,000 DLH, computed as 8,000 units x 4 DLH per unit. 2. Compute the total overhead variance.

Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 4 DLH per unit. For March, the company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following budget. The company actually operated at 90% capacity (9,000 units) in March and incurred actual total overhead costs of $89,870. Overhead Budget Production in units Budgeted variable overhead Budgeted fixed overhead 80% Operating Levels 8,000 $36,000 $ 51,000 1. Compute the standard overhead rate. Hint Standard allocation base at 80% capacity is 30,000 DLH, computed as 8,000 units x 4 DLH per unit. 2. Compute the total overhead variance.

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 17P: Shinto Corp. uses a standard cost system and manufactures one product. The variable costs per...
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Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 4 DLH per unit. For March, the company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following budget. The company actually operated at 90% capacity (9,000 units) in March and incurred actual total overhead costs of $89,870. Overhead Budget Production in units Budgeted variable overhead Budgeted fixed overhead 80% Operating Levels 8,000 $ 36,000 $ 51,000 1. Compute the standard overhead rate. Hint. Standard allocation base at 80% capacity is 30,000 DLH, computed as 8,000 units x 4 DLH per unit. 2. Compute the total overhead variance.
Transcribed Image Text:Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 4 DLH per unit. For March, the company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following budget. The company actually operated at 90% capacity (9,000 units) in March and incurred actual total overhead costs of $89,870. Overhead Budget Production in units Budgeted variable overhead Budgeted fixed overhead 80% Operating Levels 8,000 $ 36,000 $ 51,000 1. Compute the standard overhead rate. Hint. Standard allocation base at 80% capacity is 30,000 DLH, computed as 8,000 units x 4 DLH per unit. 2. Compute the total overhead variance.
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