Question
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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