Pierce Corporation Uses a Standard Cost System in Which It

question 104

Essay

Pierce Corporation uses a standard cost system in which it applies manufacturing overhead to its product on the basis of standard direct labor-hours (DLHs). Below is the standard cost card for the product: Last year, the company produced 6,000 units of product using 17,000 direct labor-hours. The actual total fixed manufacturing overhead cost for the year was $140,000 and the volume variance was $12,000, favorable.
Required:
a. Determine the budgeted amount of total fixed manufacturing overhead cost.
b. Determine the denominator activity figure that the company used in computing predetermined overhead rates.

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Definitions:

Wilkins

Maurice Wilkins, a biophysicist who contributed to the discovery of the structure of DNA.

Watson

Watson refers to James Watson, an American molecular biologist, geneticist, and zoologist, best known as one of the co-discoverers of the structure of DNA in 1953 alongside Francis Crick.

Amino Acids

Fundamental components of proteins, each containing an amino group, a carboxylic acid group, and a unique side chain.

Double Helix

The structure of DNA, which consists of two antiparallel polynucleotide chains twisted around each other.