If theoretical capacity is 12000 direct labour hours And average practical capac
ID: 2532708 • Letter: I
Question
If theoretical capacity is 12000 direct labour hours And average practical capacity is 80% = 9600 direct labour hours.And budgeted labour hours = 9490 Actual direct labour hours used = 9974
Predetermined overhead rate $113.74679
Budgeted overhead cost is $1079457 Variable $192957 Fixed $886500
Actual over head cost is $1092650 Variable $193150 Fixed $899500
What’s the highlights of idle capcity costs ?
Thank you If theoretical capacity is 12000 direct labour hours And average practical capacity is 80% = 9600 direct labour hours.
And budgeted labour hours = 9490 Actual direct labour hours used = 9974
Predetermined overhead rate $113.74679
Budgeted overhead cost is $1079457 Variable $192957 Fixed $886500
Actual over head cost is $1092650 Variable $193150 Fixed $899500
What’s the highlights of idle capcity costs ?
Thank you And average practical capacity is 80% = 9600 direct labour hours.
And budgeted labour hours = 9490 Actual direct labour hours used = 9974
Predetermined overhead rate $113.74679
Budgeted overhead cost is $1079457 Variable $192957 Fixed $886500
Actual over head cost is $1092650 Variable $193150 Fixed $899500 Variable $193150 Fixed $899500
What’s the highlights of idle capcity costs ?
Thank you
Explanation / Answer
Budgeted labour hours
9490
Budgeted overhead cost:
Variable
192957
Fixed
886500
Total budgeted overhead
1079457
Actual labour hours
9974
Actual overhead cost
Variable
193150
Fixed
899500
Total actual overhead
1092650
Highlight of idle capacity with respect to budgeted cost:
Theoretical capacity
12000
Budgeted capacity
9490
Idle capacity (12000 - 9490)
2510
Budgeted overhead cost:
Variable
192957
Fixed
886500
Total budgeted overhead
1079457
Budgeted overhead cost for idle capacity
Variable (192957 X 2510/9490)
51034.992
Fixed
0
Total budgeted overhead
51034.99
Highlight of idle capacity with respect to actual cost:
Actual labour hours
9974
Actual overhead cost
Variable
193150
Fixed
899500
Total actual overhead
1092650
Theoretical capacity
12000
Actual direct labour hours
9974
Idle capacity (12000 - 9490)
2026
Actual labour hours
9974
Actual overhead cost
Variable
193150
Fixed
899500
Total actual overhead
1092650
Actual overhead cost for idle capacity
Variable (193150X 2026/9974)
39234.199
Fixed
0
Total budgeted overhead
39234.2
Budgeted labour hours
9490
Budgeted overhead cost:
Variable
192957
Fixed
886500
Total budgeted overhead
1079457
Actual labour hours
9974
Actual overhead cost
Variable
193150
Fixed
899500
Total actual overhead
1092650