# Question: Munoz Manufacturing Co normally produces 10 000 units of product X

Munoz Manufacturing Co. normally produces 10,000 units of product X each month. Each unit requires 2 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are \$2.50 and \$1.50 per direct labor hour, respectively. Cost and production data for May follow:
Production for the month. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 units
Direct labor hours used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,500 hours
Variable costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$28,500
Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$52,000
a. Calculate the flexible-budget variance.
b. Calculate the production-volume variance.
c. Was the total factory overhead under- or overapplied? By what amount?

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• CreatedMarch 31, 2015
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