Lansing Mfg. prepared the following annual abbreviated flexiblebudget for different levels of machine hours:40,000...Lansing...

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Accounting

Lansing Mfg. prepared the following annual abbreviated flexiblebudget for different levels of machine hours:
40,000 44,000 48,000 52,000
Variable manufacturing overhead $80,000 $88,000 $96,000 $104,000
Fixed manufacturing overhead 325,000 325,000 325,000 325,000
Each product requires four hours of machine time, and thecompany expects to produce 10,000 units for the year. Production isexpected to be evenly distributed throughout the year.
a. Calculate separate predetermined variable and fixed OH ratesusing as the basis of application (1) units of production and (2)machine hours.
Note: Do not round your answers.
Variable OH Rate Fixed OH Rate
(1) Units of product
(2) Machine hours
b. Calculate the combined predetermined OH rate using (1) unitsof product and (2) machine hours.
Note: Do not round your answers.
Combined Rate
(1) Units of product
(2) Machine hours
c. Assume that all actual overhead costs are equal to expectedoverhead costs for the year, but that Lansing Mfg. produced 11,000units of product. If the separate rates based on units of productcalculated in (a) were used to apply overhead, what amounts ofunderapplied or overapplied variable and fixed overhead exist atyear-end?
Note: Do not use a negative sign with your answer.
Variable OH OverappliedUnderappliedNeither over or under applied
Fixed OH OverappliedUnderappliedNeither over or under applied
Lansing Mfg. prepared the following annual abbreviated flexiblebudget for different levels of machine hours:
40,000 44,000 48,000 52,000
Variable manufacturing overhead $80,000 $88,000 $96,000 $104,000
Fixed manufacturing overhead 325,000 325,000 325,000 325,000
Each product requires four hours of machine time and the companyexpects to produce 10,000 units for the year. Assume that LansingMfg. has decided to use units of production to apply overhead toproduction. In April of the current year, the company produced 900units and incurred $7,500 and $26,500 of variable and fixedoverhead, respectively.

a. What amount of variable manufacturing overhead should be appliedto production in April?
Applied VOH $Answer

b. What amount of fixed manufacturing overhead should be applied toproduction in April?
Applied FOH $Answer

c. Calculate the under- or overapplied variable and fixed overheadfor April.
Note: Do not use negative signs with your answers.
Variable OH OverappliedUnderappliedNeither over- or underapplied
Fixed OH OverappliedUnderappliedNeither over- or underapplied

	40,000	44,000	48,000	52,000
Variable manufacturing overhead	$80,000	$88,000	$96,000	$104,000
Fixed manufacturing overhead	325,000	325,000	325,000	325,000

	40,000	44,000	48,000	52,000
Variable manufacturing overhead	$80,000	$88,000	$96,000	$104,000
Fixed manufacturing overhead	325,000	325,000	325,000	325,000

Answer & Explanation Solved by verified expert

3.9 Ratings (501 Votes)

Since the company expects to produce 10000 units for the year and each unit requires four hours of machine time therefore total hours of machine time is equal to 10000 units 4 hours per unit 40000 machine hours a Calculation of predetermined variable and fixed overheads on basis of 1 units of production Variable overhead rate Total Variable Overheads Units of production 80000 10000 units 8 per unit Fixed overhead rate Total Fixed Overheads Units of production 325000 10000 units 325 per unit Calculation of predetermined variable and fixed overheads on See Answer

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Transcribed Image Text

In: AccountingLansing Mfg. prepared the following annual abbreviated flexiblebudget for different levels of machine hours:40,000...Lansing Mfg. prepared the following annual abbreviated flexiblebudget for different levels of machine hours:40,00044,00048,00052,000Variable manufacturing overhead$80,000$88,000$96,000$104,000Fixed manufacturing overhead325,000325,000325,000325,000Each product requires four hours of machine time, and thecompany expects to produce 10,000 units for the year. Production isexpected to be evenly distributed throughout the year.a. Calculate separate predetermined variable and fixed OH ratesusing as the basis of application (1) units of production and (2)machine hours.Note: Do not round your answers.Variable OH RateFixed OH Rate(1) Units of product(2) Machine hoursb. Calculate the combined predetermined OH rate using (1) unitsof product and (2) machine hours.Note: Do not round your answers.Combined Rate(1) Units of product(2) Machine hoursc. Assume that all actual overhead costs are equal to expectedoverhead costs for the year, but that Lansing Mfg. produced 11,000units of product. If the separate rates based on units of productcalculated in (a) were used to apply overhead, what amounts ofunderapplied or overapplied variable and fixed overhead exist atyear-end?Note: Do not use a negative sign with your answer.Variable OHOverappliedUnderappliedNeither over or under appliedFixed OHOverappliedUnderappliedNeither over or under appliedLansing Mfg. prepared the following annual abbreviated flexiblebudget for different levels of machine hours:40,00044,00048,00052,000Variable manufacturing overhead$80,000$88,000$96,000$104,000Fixed manufacturing overhead325,000325,000325,000325,000Each product requires four hours of machine time and the companyexpects to produce 10,000 units for the year. Assume that LansingMfg. has decided to use units of production to apply overhead toproduction. In April of the current year, the company produced 900units and incurred $7,500 and $26,500 of variable and fixedoverhead, respectively.a. What amount of variable manufacturing overhead should be appliedto production in April?Applied VOH $Answerb. What amount of fixed manufacturing overhead should be applied toproduction in April?Applied FOH $Answerc. Calculate the under- or overapplied variable and fixed overheadfor April.Note: Do not use negative signs with your answers.Variable OHOverappliedUnderappliedNeither over- or underappliedFixed OHOverappliedUnderappliedNeither over- or underapplied

Variable OH		OverappliedUnderappliedNeither over or under applied
Fixed OH		OverappliedUnderappliedNeither over or under applied

Variable OH		OverappliedUnderappliedNeither over- or underapplied
Fixed OH		OverappliedUnderappliedNeither over- or underapplied