Eastern Company Uses a Standard Cost System in Which Manufacturing

question 45

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.

---

Definitions:

Labor Costs

The total sum of all wages paid to employees, as well as the costs related to employee benefits and payroll taxes.

Progressive Disciplinary

A gradual approach to disciplining employees for policy violations, typically starting with a warning and escalating to more severe consequences.

Verbal Warnings

The first step in most progressive disciplinary programs are cautions conveyed orally to the employee.

Employee Suspension

A temporary removal of an employee from their position, typically as a disciplinary action.