the allocation base. This period's estimat $500,000 and estimated direct labour he
the allocation base. This period's estimat $500,000 and estimated direct labour he
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 8PB: Queen Bees Honey, Inc., estimated its annual overhead to be $110,000 and based its predetermined...
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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.
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Question
![TSC uses job costing and applies overhead using a normal costing system using direct labour hours as
the allocation base. This period's estimated overhead cost is $400,000, estimated direct labour cost is
$500,000 and estimated direct labour hours are 25,000. This period's actual overhead cost was
$420,000, actual direct labour cost was $390,000, and actual direct labour hours were 20,000.
Direct
Direct
Materials
$200
250
500
Direct
Labour Cost Labour Hours
$800
200
40
Job 400
Job 401
Job 402
10
600
32
What is the overhead allocation rate?
$21/hour
$10/hour
O $16/hour
$18/hour](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F126c3702-ea49-463e-b972-3c68cf2eb604%2F2ec6e79b-df90-464c-9c3f-1adb78133fdb%2Feqr8z39_processed.jpeg&w=3840&q=75)
Transcribed Image Text:TSC uses job costing and applies overhead using a normal costing system using direct labour hours as
the allocation base. This period's estimated overhead cost is $400,000, estimated direct labour cost is
$500,000 and estimated direct labour hours are 25,000. This period's actual overhead cost was
$420,000, actual direct labour cost was $390,000, and actual direct labour hours were 20,000.
Direct
Direct
Materials
$200
250
500
Direct
Labour Cost Labour Hours
$800
200
40
Job 400
Job 401
Job 402
10
600
32
What is the overhead allocation rate?
$21/hour
$10/hour
O $16/hour
$18/hour
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