MANUFACTURING OVERHEAD VARIANCES

The Maple Queen Company bakes bagels for distribution to upmarket grocery outlets and hotel restaurants. The company has two direct cost categories, direct materials and direct labour and uses normal and standard costing. Variable and fixed manufacturing overhead is allocated to bagels on the basis of standard direct manufacturing labour hours. For the year ended 31 December 2015, variable manufacturing overhead was allocated at $10/direct manufacturing labour hour and fixed manufacturing overhead was allocated at $4/direct manufacturing labour hour. Other actual and budgeted data for 2015 is displayed in Exhibit

Exhibit Additional actual and budgeted data for Maple Queen Company for 2015

Standard direct manufacturing labour use	0.02 hours/bagel
Budgeted output	3,200,000 bagels
Actual production	2,800,000 bagels
Direct manufacturing labour used	50,400 hours
Actual variable manufacturing overhead	$680,400
Actual fixed manufacturing overhead	$272,000

Required:

(a) Calculate the manufacturing overhead variances in as much detail as possible.

(b) Write the journal entries (no narrations required) to:

Allocate the fixed manufacturing overhead to production in 2015

Record the actual fixed manufacturing overhead costs for 2015

Close the overhead accounts used in (i) and (ii) to the appropriate fixed manufacturing overhead variance accounts

Close the fixed manufacturing overhead variance accounts to the cost of goods sold account