Question
Wilson Products uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labor-hours (DLH). The
Wilson Products uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labor-hours (DLH).
The actual costs, compared with the annual budget and 1/12 of the annual budget, are as follows:
Annual Manufacturing Overhead Budget 2017 |
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| Per | Per DLH | Monthly | Actual MOH |
| Total | Output | Input | MOH Budget | Costs for |
| Amount | Unit | Unit | May 2017 | May 2017 |
Variable MOH |
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Indirect manufacturing labor | $ 1,008,000 | $ 1.50 | $ 0.30 | $ 84,000 | $ 84,000 |
Supplies | 672,000 | 1.00 | 0.20 | 56,000 | 117,000 |
Fixed MOH |
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Supervision | 571,200 | 0.85 | 0.17 | 47,600 | 41,000 |
Utilities | 369,600 | 0.55 | 0.11 | 30,800 | 55,000 |
Depreciation | 705,600 | 1.05 | 0.21 | 58,800 | 58,800 |
Total | $ 3,326,400 | $ 4.95 | $ 0.99 | $ 277,200 | $ 355,800 |
Calculate the following amounts for Wilson Products for May 2017:
1.Total manufacturing overhead costs allocated
2.Variable manufacturing overhead spending variance
3.Fixed manufacturing overhead spending variance
4.Variable manufacturing overhead efficiency variance
5.Production-volume variance
Be sure to identify each variance as favorable (F) or unfavorable (U).
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