The Ceramic Company produced 950 decorative ceramic pots during August. The budgeted direct costs for each pot is 2.5 lbs if materials at \$1.50 per lb and 1.0 labor hour at \$30 per hour. Variable over…

The Ceramic Company produced 950 decorative ceramic pots during
August. The budgeted direct costs for each pot is 2.5 lbs if
materials at \$1.50 per lb and 1.0 labor hour at \$30 per hour.
Variable overhead is applied and predetermined rate of \$8.00 per
labor hour. Fixed overhead costs are applied at rate of \$32 per pot
based on an expected production of 1,000 pots per month, even
though Alma’s current maximum capacity is 1,000 pots per month.

Alma’s accounting records for the month indicate that they had a
beginning materials inventory of 1,800 lbs, an ending materials
inventory of 1,900 lbs and used 3,100 lbs in production. Purchases
of materials during the month costs of \$3,520. Also, during August
employee record indicate 1,000 direct labor hours were used at an
average cost of \$31 per hour. Actual variable overhead costs were
\$7,500 and \$33,950 was spent for fixed overhead.

1. Provide a schedule of resources used and supplied for the fixed

Solutions

Expert Solution

:-

Costs:

Budgeted Fixed costs p.m = 32000( 32*1000)

standard fixed costs = 30400( 950*32)

Actual Fixed cost = 33950( given)

Note* Standard fixed cost is budgeted cost for
actual unit.

Fixed Overhead Vol. Var= (standard volume- actual volume)*
standard rate

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