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6. The following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output

6. The following standards for variable manufacturing overhead have been established for a

company that makes only one product:

Standard hours per unit of output .............. 5.6 hours

Standard variable overhead rate ................ $19.15 per hour

The following data pertain to operations for the last month:

Actual hours ................................................ 5,100 hours

Actual total variable overhead cost ............. $99,195

Actual output ............................................... 1,100 units

Calculate the Variable MOH Spending and Efficiency Variance. Explain your answer

7. Explain which Material Variance (Quantity or Price) is calculated first and why is there a specific

order in which these calculations are made. Discuss the responsibility of Production Manager and

Purchasing Manager in relation to the calculation of Material Variances.

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