Question: Clarke Products uses standard costing It allocates manufacturing overhead both

Clarke Products uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labor- hours (DLH). Clarke develops its manufacturing overhead rate from the current annual budget. The manufacturing overhead budget for 2013 is based on budgeted output of 636,000 units, requiring 3,816,000 DLH. The company is able to schedule production uniformly throughout the year. A total of 74,000 output units requiring 318,000 DLH was produced during May 2013. Manufacturing overhead (MOH) costs incurred for May amounted to $ 340,200. The actual costs, compared with the annual budget and 1/ 12 of the annual budget, are:

Calculate the following amounts for Clarke Products for May 2013:
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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  • CreatedJanuary 15, 2015
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