Actual Static Results Budget 230 180 322 The Tolerances Corporation (June 2017) Number of centrifuges assembled and sold Hours of assembly time Variable manufacturing overhead cost per hour of assembly time Variable manufacturing overhead costs Fixed manufacturing overhead costs $ 29.00 9,758 $ 18,720 $ 17,280 The Tolerances Corporation is a manufacturer of centrifuges. Fixed and variable manufacturing overheads are allocated to each centrifuge using budgeted assembly-hours. Budgeted assembly time is 2 hours per unit. The following table shows the budgeted amounts and actual results related to overhead for June 2017 1. Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead variances. 2. Prepare journal entries for Tolerances' June 2017 variable and fixed manufacturing overhead costs and variances; write off these variances to Cost of Goods Sold for the quarter ending June 30, 2017 3. How does the planning and control of variable manufacturing overhead costs differ from the planning and control of fixed manufacturing overhead costs? Requirement 1. Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead variances. Begin by calculating the following amounts for the variable overhead. X Flexible Budget Allocated Overhead Actual Input Actual Costs Incurred Budgeted Rate Variable OH 420 Now complete the table below for the fixed manufacturing overhead. Same Budgeted Lump Sum Actual Costs Regardless of Incurred Output Level Fixed OH Flexible Allocated Budget Overhead Now complete the 4-variance analysis using the amounts you calculated above. (If no variance exists leave the dollar value blank Label the variance as favorable (F), unfavorable (U) or never a variance (N).) Production-Volume Spending Variance Efficiency Variance Variance 4-Variance Analysis Variable OH Fixed OH Requirement 2. Prepare journal entries for Tolerances' June 2017 variable and fixed manufacturing overhead costs and variances; write off these variances to cost of Goods Sold for the quarter ending June 30, 2017. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin by recording the actual variable manufacturing overhead incurred. Journal Entry Accounts Date Debit Credit Record the variable manufacturing overhead allocated Record the variable manufacturing overhead allocated. Journal Entry Date Accounts Debit Credit Record the variable manufacturing overhead variances for the period. Journal Entry Accounts Date Debit Credit Record the variable manufacturing overhead variance write-off. Record the variable manufacturing overhead variance write-off. Journal Entry Date Accounts Debit Credit Record the actual fixed overhead costs incurred. Journal Entry Date Accounts Debit Credit Record the fixed overhead costs allocated. Journal Entry Date Accounts Debit Credit Record the fixed overhead variances for the period. Journal Entry Date Accounts Debit Credit Record the fixed manufacturing overhead variance write-off. Journal Entry Accounts Date Debit Credit Requirement 3. How does the planning and control of variable manufacturing overhead costs differ from the planning and control of fixed manufacturing overhead costs? and for the short-run focus to Planning and control of variable manufacturing overhead costs has both a long-run and a short-run focus. The long-run focus involves Tolerances planning to in the most efficient way for a budgeted level of output. Tolerances makes of the key Planning and control of manufacturing overhead costs have primarily a long-run focus. It involves decisions that determine the level of overhead costs at the start of the accounting period