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The Alpha Corporation is a manufacturer of microwave oven. Fixed and variable manufacturing overheads are allocated to each microwave oven using budgeted assembly-hours. Budgeted assembly
The Alpha Corporation is a manufacturer of microwave oven. Fixed and variable manufacturing overheads are allocated to each microwave oven using budgeted assembly-hours. Budgeted assembly time is 2 hours per unit. The following table shows the budgeted amounts and actual results related to overhead for June 2019. Actual results Static budget Number of microwave ovens assembled and sold 220 150 Hours of assembly time 396 Variable manufacturing overhead cost per hour of assembly time $31.00 Variable manufacturing overhead costs $12,693 Fixed manufacturing overhead costs $15,510 $14,100 Required: a. Calculate variable manufacturing overhead spending variance and efficiency variance. (6 marks) b. Calculate fixed manufacturing overhead spending variance and production-volume variance. (8 marks) c. Prepare journal entries for Alpha June 2019 to record fixed manufacturing overhead allocated as well as to record variances for the accounting period. (6 marks)
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