Eastern Company Uses a Standard Cost System in Which Manufacturing

question 86

Essay

Eastern Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours (DLHs). The denominator activity level is 60,000 direct labor-hours, or 300,000 units.
• A standard cost card for the company's product follows:
• Actual data for the year follow:
Required:
a. Compute the variable overhead rate and efficiency variances.
b. Compute the fixed manufacturing overhead budget and volume variances.

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