Nolton-Ragnvald AS uses a standard costing system. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labour-hours (DLH). Nolton develops its manufacturing overhead rate from the current annual budget. The manufacturing overhead budget for 2015 is based on budgeted output of 720 000 units requiring 3 600 000 direct manufacturing labour-hours. The company is able to schedule production uniformly throughout the year.
A total of 66 000 output units requiring 315 000 direct labour-hours was produced during May 2015. Manufacturing overhead (MOH) costs incurred for May amounted to NOK 375 000. The actual costs as compared with the annual budget and 1/12 of the annual budget are shown below.
Annual manufacturing overhead budget 2015

Required
Calculate the following amounts for Nolton-Ragnvald for May 2015:
1. Total manufacturing overhead costs allocated.
2. Variable manufacturing overhead spending variance.
3. Fixed manufacturing overhead spending variance.
4. Variable manufacturing overhead efficiency variance.
5. Production-volume variance.
Be sure to identify each variance as favourable (F) or unfavourable (U).

Per output unit Per DLH input unit Monthly MOH budget, May 2015 Actual MOH costs for May 2015 Total amount Variable MOH Indirect mfg labour Supplies NOK 900 000 1 224 000 NOK 1.25 1.70 NOK 0.25 0.34 NOK 75 000 102 000 NOK 75 000 111 000 Fixed MOH Supervision Utilities 648 000 540 000 1 008 000 NOK 4320 000 0.90 0.75 1.40 NOK 6.00 0.18 0.15 0.28 NOK 1.20 54 000 45 000 84 000 NOK 360 000 51 000 54 000 84 000 NOK 375 000 epreciation Total