STANDARD COST SYSTEM MOH VARIANCES (must show calculations)

Company budgeted production level in units is 60,000 units of output with a budgeted fixed cost of $480,000 and budgeted variable cost of $348,000. Each unit requires 2 hours of direct labor. (Use T accounts to help yourself)

Actual results:

Production: 58,500 units

Direct labor hours used: 128,700

Total actual MOH costs incurred: $819,228

Total actual FIXED MOH costs incurred: $480,643

1. Calculate the standard (budgeted) VMOH cost per unit and per hour:

VMOH per unit: $__________________

VMOH per hour: $_________________

2. Calculate the standard (budgeted) FMOH cost per unit and per hour:

FMOH per unit: $___________________

FMOH per hour: $___________________

3. Calculate the standard VMOH allocated to production during the year and prepare journal entry:

VMOH Allocated: $_____________________

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4. Calculate the standard FMOH allocated to production during the year and prepare journal entry:

FMOH Allocated $_______________________

__________________________________________________________________DR_____________CR_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

CONTINUED ON NEXT PAGE:

CONTINUED MOH VARIANCES (indicate whether favorable (F) or unfavorable (U):

5A. Calculate the total VMOH variance:

Total VMOH VAR. $__________

5B. Calculate the VMOH spending (price) variance:

VMOH Spending Var.: $_____________U F

5C. Calculate the VMOH efficiency (quantity) variance:

VMOH Efficiency Var.: $____________U F

6A Calculate the total FMOH variance:

Total FMOH VAR. $________

6B Calculate FMOH Spending variance:

FMOH Spending Var.: $____________U F

6C Calculate FMOH Volume variance:

FMOH Volume Var.: $_____________U F