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The Thailand division of an American telecommunications company uses standard costing for its machine-paced production of telephone equipment. Data regarding production during June are as
The Thailand 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:
1. | Prepare an analysis of all manufacturing overhead variances. Use the 4-variance analysis framework. |
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. |
Variable manufacturing overhead costs incurred Variable manufacturing overhead cost rate Fixed manufacturing overhead costs incurred Fixed manufacturing overhead costs budgeted Denominator level in machine-hours Standard machine-hour allowed per unit of output Units of output Actual machine-hours used Ending work-in-process inventory $537,500 S7 per standard machine-hour $146,400 $136,000 68,000 1.2 64,800 75,700 Variable manufacturing overhead costs incurred Variable manufacturing overhead cost rate Fixed manufacturing overhead costs incurred Fixed manufacturing overhead costs budgeted Denominator level in machine-hours Standard machine-hour allowed per unit of output Units of output Actual machine-hours used Ending work-in-process inventory $537,500 S7 per standard machine-hour $146,400 $136,000 68,000 1.2 64,800 75,700
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