In the current month, the company incurred $340,000 actual overhead and 39,000 actual labor hours…


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In the current month, the company incurred $340,000 actual overhead and 39,000 actual labor hours… 1 answer below » Earth Company expects to operate at 80% of its productive capacity of 25,000 units per month. At this planned level, the company expects to use 40,000 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate based on direct labor hours. At the 80% capacity level, the total budgeted cost includes $40,000 fixed overhead cost and $280,000 variable overhead cost. In the current month, the company incurred $340,000 actual overhead and 39,000 actual labor hours while producing 19,500 units. (1) Compute its overhead application rate for total overhead. (2) View complete question » Earth Company expects to operate at 80% of its productive capacity of 25,000 units per month. At this planned level, the company expects to use 40,000 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate based on direct labor hours. At the 80% capacity level, the total budgeted cost includes $40,000 fixed overhead cost and $280,000 variable overhead cost. In the current month, the company incurred $340,000 actual overhead and 39,000 actual labor hours while producing 19,500 units. (1) Compute its overhead application rate for total overhead. (2) Compute its total overhead variance. View less » Jul 24 2014 07:50 AM

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