Question
Grant Manufacturing uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labor-hours (DMLH). The
Grant Manufacturing uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labor-hours (DMLH).
The actual costs, compared with the annual budget and 1/12 of the annual budget, are as follows:
Annual Manufacturing Overhead Budget 2020 | |||||
Per | Per DMLH | Monthly | Actual MOH | ||
Total | Output | Input | MOH Budget | Costs for | |
Amount | Unit | Unit | August 2020 | August 2020 | |
Variable MOH | |||||
Indirect manufacturing labor | $921,600 | $1.60 | $0.40 | $76,800 | $76,800 |
Supplies | 576,000 | 1.00 | 0.25 | 48,000 | 89,400 |
Fixed MOH | |||||
Supervision | 691,200 | 1.20 | 0.30 | 57,600 | 47,100 |
Utilities | 345,600 | 0.60 | 0.15 | 28,800 | 39,900 |
Depreciation | 806,400 | 1.40 | 0.35 | 67,200 | 75,900 |
Total | $3,340,800 | $5.80 | $1.45 | $278,400 | $329,100 |
Grant develops its manufacturing overhead rate from the current annual budget for . The manufacturing overhead budget for 2020 is based on budgeted output of 576,000units, requiring 2,304,000 DMLH. The company is able to schedule production uniformly throughout the year. A total of 46,000 output units requiring 193,200 DMLH was produced during August 2020. Manufacturing overhead (MOH) costs incurred for amounted to 329,100.
1. Calculate total manufacturing overhead costs allocated.
Begin by computing the budgeted hours per unit. Determine the formula, then compute the amount.
Now calculate the total manufacturing overhead (MOH) costs allocated. Determine the formula, then complete the calculation.
= | Total MOH costs allocated | |||||
= |
Budgeted DMLH | Budgeted units | Budgeted hours per unit | ||
2,304,000 | 576,000 | 4 |
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