Question
Amnesty Elements uses a standard cost system, applying manufacturing overhead on the basis of machine hours. The company's overhead standards per unit are shown below.
Amnesty Elements uses a standard cost system, applying manufacturing overhead on the basis of machine hours. The company's overhead standards per unit are shown below.
Variable overhead: 4 hours at $9 per hour Fixed overhead: 4 hours at $6* per hour *Based on planned monthly activity of 120,000 machine hours Actual data for May were: Number of units produced: 29,000 Number of machine hours worked: 125,000 Variable overhead costs incurred: $1,085,000 Fixed overhead costs incurred: $755,000
A. Calculate the spending and efficiency variances for variable overhead. B. Calculate the budget and volume variances for fixed overhead.
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