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Norwall Company's variable manufacturing overhead should be 3.00 per standard machine-hour and its fixed manufacturing overhead should be 300,000 per period. The following information is available for a recent period: (i) The denominator activity of 60,000 machine-hours is used to compute the predetermined overhead rate. (ii) At the 60,000 standard machine-hours level of activity, the company should produce 40,000 units of product. (iii) The company's actual operating results were:
(b) Compute the standard hours allowed for the actual production.

Respuesta :

The standard hours allowed for the actual production is 63,000 hours.

Standard hours is the variety of hard work hours spent to provide one unit of completed goods. the same old price is the variable value which incorporates direct exertions, direct material, and variable overhead. at some stage in the budget instruction, the agency calculates the standard price of 1 unit product.

There isn't a lot of difference between standards and budget. In value and management accounting, the term “standard fee” approach the budgeted cost of one unit of product, and the time period budget method is the fee of complete budgeted production. For example, Excel's health Care organization uses a popular costing system.

A trendy is a predetermined amount or price of entry this is installed for in line with a unit of product synthetic or carrier furnished. A price range is a declaration that forecasts the incomes and costs of a branch or entity over a targeted time period.

Standard unit production = 40,000

Standard machine hours = 60,000

Standard machine hours per unit  = 60,000 / 40,000

= 1.5 hours per unit.

Numbers of units produced = 42,000

Standard machine hours per unit = 1.5 hours per unit.

Standard hours allowed for actual production = 42,000 * 1.5

= 63,000 hours.

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