Question

The Singapore division of a Canadian telecommunications company uses a standard cost system for its machine-based production of telephone equipment. Data regarding production during June are as follows:
Variable manufacturing overhead costs incurred .......... $186,120
Variable manufacturing overhead costs allocated (per standard
machine-hour allowed for actual output achieved) ......... $ 14.40
Fixed manufacturing overhead costs incurred........... $481,200
Fixed manufacturing overhead budgeted .............. $468,000
Denominator level in machine-hours ............... 15,600
Standard machine hours allowed per unit of output ......... 0.30
Units of output ........................ 49,200
Actual machine-hours used .................. 15,960
Ending work-in-process inventory ................ 0
REQUIRED
1. Prepare an analysis of all manufacturing overhead variances. Use the four-variance analysis framework illustrated in Exhibit 8-12.
2. Prepare journal entries for manufacturing overhead without explanations.
3. Describe how individual variable manufacturing overhead items are controlled from day to day. Also, describe how individual fixed manufacturing overhead items are controlled.


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  • CreatedJuly 31, 2015
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