Question: Kenneth was working away at his first attempt at variance analysis for his manufacturing company. He filled in variable-and fixed-MOH costs where he saw fit,

Kenneth was working away at his first attempt at variance analysis for his manufacturing company. He filled in variable-and fixed-MOH costs where he saw fit, before actually calculating the related price, efficiency, and volume variances. Since he was focusing on the overhead costs specifically, he made note of the allocation base being used, machine hours. Here is his work so far:

Variable-MOH: $16,700 (Actual Variable-MOH Cost). $15,450 (Variable-MOH Flexible Budget). $15,450 (Applied Variable-MOH Cost)

Fixed-MOH: $27,350 (Fixed-MOH Master Budget). $26,550 (Applied Fixed-MOH Cost). $24,100 (Actual Fixed-MOH Cost)

Kenneth isn't sure if he puts the right costs in the right places. There were also a couple of costs that he didn't include, because he wasn't sure if they belonged, as follows.

Actual machine hours @ budgeted variable-MOH rate: $16,050

Flexible budget fixed-MOH cost: $27,350

Using your corrected framework from part (a), determine the variable-MOH price and efficiency variances. Was variable-MOH under-or overapplied this year? By how much?

Variable-MOH price variance $_____________. Unfavorable

Variable-MOH efficiency variance $_____________. Favorable, Unfavorable, or Neither Favorable Nor Unfavorable

Variable-MOH $_____________. Under-applied or Over-applied

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