The Mongolia division of a Canadian telecommunications company uses standard costing for its machine- paced production of telephone equipment. Data regarding production during June are:

Variable manufacturing overhead costs incurred..... $ 541,690

Variable manufacturing overhead cost rate....... $ 7 per standard machine- hour

Fixed manufacturing overhead costs incurred..... $ 146,300

Fixed manufacturing overhead costs budgeted..... $ 138,000

Denominator level in machine- hours........ 69,000

Standard machine- hour allowed per unit of output... 1.2

Units of output .................65,100

Actual machine- hours used .............76,300

Ending work- in- process inventory .........0

Required

1. Prepare an analysis of all manufacturing overhead variances. Use the variance analysis framework illustrated in Exhibit 13- 6 (page 559).

2. Describe how individual variable manufacturing overhead items are controlled from day to day.

3. Discuss possible causes of the variable manufacturing overhead variances.