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P8-37 (similar to) Question Help Radiant, Inc., is a manufacturer of vacuums and uses standard costing. Manufacturing overhead (both variable and fixed) is allocated to
P8-37 (similar to) Question Help Radiant, Inc., is a manufacturer of vacuums and uses standard costing. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of budgeted machine-hours. In 2017, budgeted fixed manufacturing overhead cost was $21,000,000. Budgeted variable manufacturing overhead was $12 per machine-hour. The denominator level was 1,000,000 machine-hours. 2. Suppose that 1,050,000 machine-hours were allowed for actual output produced in 2017, but 975,000 actual machine-hours were used. Actual manufacturing overhead was $12,187,500, variable, and $21,075,000, fixed. Compute (a) the variable manufacturing overhead spending and efficiency variances and (b) the fixed manufacturing overhead spending and production-volume variances 3. What is the amount of the under-or overallocated variable manufacturing overhead and the under- or overallocated fixed manufacturing overhead? Why are the flexible-budget variance and the under- or overallocated overhead amount always the same for variable manufacturing overhead but rarely the same for fixed manufacturing overhead? 4. Suppose the denominator level was 700,000 rather than 1,000,000 machine-hours. What variances in requirement 2 would be affected? Recompute them
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