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In October, Falk Inc

question 150

Essay

In October, Falk Inc. reports 42,000 actual direct labor hours, and it incurs $192,000 of manufacturing overhead costs. Standard hours allowed for the work done is 40,000 hours. Falk's predetermined overhead rate is $5.00 per direct labor hour.
Instructions
Compute the total manufacturing overhead variance.


Definitions:

Gross Profit Margin

A financial metric that measures the percentage of revenue exceeding the cost of goods sold.

Cost Of Goods Sold

The total expense incurred by a business to manufacture or acquire products that were sold during a specific period.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the costs associated with making or selling products.

Profitability

A financial metric used to assess the ability of a business to generate earnings relative to its revenue, assets, equity, or other financial metrics.

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