50.1K

Verified Solution

Link Copied!

Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot com clients. When o client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 180,000 items were shipped to customers using 7,700 direct labor-hours. The company incurred a total of $26.180 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.45 per direct labor-hour. Required: 1. What is the stondard labor-hours allowed (SH) to ship 180,000 items to customers? 2. What is the standard variable overhead cost allowed ( SHSR ) to ship 180,000 items to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficiency variance? (For requirements 3 and 4 , indicate the effect of each variance by selecting "F" for favorable, " U " for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.)

Answer & Explanation Solved by verified expert

See Answer