Straightforward coverage of manufacturing overhead, standard-costing system.

The Brazil

division of an American telecommunications company uses standard costing for its machine-

paced production of telephone equipment. Data regarding production during June are as follows:

Variable manufacturing overhead costs incurred

$537,470

Variable manufacturing overhead cost rate

$7 per standard machine-hour

Fixed manufacturing overhead costs incurred

$146,101

Fixed manufacturing overhead costs budgeted

$136,000

Denominator level in machine-hours

68,000

Standard machine-hour allowed per unit of output

1.2

Units of output

66,500

Cost Accounting

Final Problems

Fall 2018

Actual machine-hours used

75,700

Ending work-in-process inventory

0

Required

1. Prepare an analysis of all manufacturing overhead variances. Use the 4-variance

analysis framework illustrated in

Exhibit 8-4.

2. Prepare journal entries for manufacturing overhead costs and their variances.

3. Describe how individual variable manufacturing overhead items are controlled from

day to day.

4. Discuss possible causes of the variable manufacturing overhead variances