Question 6

• Time: 33 minutes
• Total: 20 marks

The Mandeep Corporation uses a standard costing system in the creation of awards and trophies. The Manufacturing overhead costs are applied to products based on machine time.

Required:

Unfortunately, due to accounting glitches in the software, several numbers and labels have been omitted from the analysis of fixed overhead below. Supplying the missing 5 items will help to answer the questions:

Actual Fixed Overhead Cost	Flexible Budget Overhead Cost	Fixed Overhead Cost Applied to Work in Process
(a)	(b)	303,000 MH x $1.1 = (c)
	Budget variance, $1,220 F	(d) (e)
	Total variance, $6,720 F

1. Assume that 6 minutes of machine time is standard per unit of production. How many units were produced in the situation above?

2. Assume that 6 minutes of machine time is standard per unit of production. How many units of production were assumed when the predetermined application rate for fixed overhead was established?