Nolton Products uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labour-hours (DLH). Nolton develops its manufacturing overhead rate from the current annual budget. The manufacturing overhead budget for 2013 is based on budgeted output of 720,000 units, requiring 3,600,000 DLH. The company is able to schedule production uniformly throughout the year.

A total of 66,000 output units requiring 315,000 DLH was produced during May 2013.

Manufacturing overhead (MOH) costs incurred for May amounted to $375,000. The actual costs, compared with the annual budget and 1/12 of the annual budget, are as follows:

REQUIRED
Calculate the following amounts for Nolton Products for May 2013:
1. Total manufacturing overhead costs allocated.
2. Variable manufacturing overhead rate variance.
3. Fixed manufacturing overhead rate variance.
4. Variable manufacturing overhead efficiency variance.
5. Production-volume variance.
Be sure to identify each variance as favourable (F) or unfavourable (U).

Annual Manufacturing Overhead Budget 2013 Per DLH Output Input MonthlyActual MOH Budget Per MOH Costs for Total Amount Unit Unit May 2013 May 2013 Variable MOH Indirect manufacturing S 900,000 1.25 1.70 $ 75,000 111,000 labour $0.25 75,000 102,000 0.34 0.18 0.28 Supplies 1,224,000 Fixed MOH Supervision Utilities Depreciation 648,000 540,000 1,008,000 $4,320,000 0.90 0.75 1.40 $6.00 54,000 45,000 84,000 1.20 S360,000 1,000 54,000 84,000 $375,000 Total