=+12-24 KKK Straightforward coverage of manufacturing overhead, standard costing system OBJECTIVES 3, 4, 5 The Singapore division of a New Zealand telecommunications company uses standard costing for its machine-based production of telephone equipment. Data regarding production during June are as follows:

Variable manufacturing overhead costs incurred $618 840 Variable manufacturing overhead cost rate $8 per standard machine-hour Fixed manufacturing overhead costs incurred $145 790 Fixed manufacturing overhead costs budgeted $144 000 Denominator level in machine-hours 72 000 Standard machine-hour allowed per unit of output 1.2 Units of output 65 500 Actual machine-hours used 76 400 Ending work-in-process inventory 0 Required 1 Prepare an analysis of all manufacturing overhead variances. Use the 4-variance analysis framework illustrated in Figure 12-4

(p. 482).

2 Prepare journal entries for manufacturing overhead costs and their variances.

3 Describe how individual variable manufacturing overhead items are controlled from day to day.

4 Discuss possible causes of the variable manufacturing overhead variances.

496 Chapter 12: Flexible budgets, overhead cost variances and management control M12_HORN3377_02_LT_C12.indd 496 2/09/13 3:50 PM