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The Rotations Corporation is a manufacturer of centrifuges. Fixed and variable manufacturing overheads are allocated to each centrifuge using budgeted assembly-hours. Budgeted assembly time is

The Rotations Corporation is a manufacturer of centrifuges. Fixed and variable manufacturing overheads are allocated to each centrifuge 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 2014.

Actual

Static

The Rotations Corporation (June 2014)

Results

Budget

Number of centrifuges assembled and sold

240

190

Hours of assembly time

312

Variable manufacturing overhead cost per hour of assembly time

$28.00

Variable manufacturing overhead costs

$9,148

Fixed manufacturing overhead costs

$19,990

$18,620

Requirements

1.

Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead variances.

2.

Prepare journal entries for Rotations' June 2014 variable and fixed manufacturing overhead costs and variances; write off these variances to cost of goods sold for the quarter ending June 30,2014.

3.

How does the planning and control of variable manufacturing overhead costs differ from the planning and control of fixed manufacturing overhead costs?

Requirement 1. Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead variances.

Begin by calculating the following amounts for the variable overhead.

Actual Input

Actual Costs

x

Flexible

Allocated

Incurred

Budgeted Rate

Budget

Overhead

Variable OH

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