Wilson Products uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labor-hours (DLH). Wilson Products develops its manufacturing overhead rate from the current annual budget. The manufacturing overhead budget for 2017 is based on budgeted output of 648,000 units, requiring 3,888,000 DLH. The company is able to schedule production uniformly throughout the year.

A total of 73,000 output units requiring 325,000 DLH was produced during May 2017. Manufacturing overhead (MOH) costs incurred for May amounted to $338,120. The actual costs, compared with the annual budget and 1/12 of the annual budget, are as follows:

Calculate the following amounts for Wilson Products for May 2017:

Required

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).

Transcribed Image Text:

Annual Manufacturing Overhead Budget 2017 Per Output Unit Monthly MOH Budget May 2017 Actual MOH Total Per DLH Costs for Amount Input Unit May 2017 Variable MOH S 8,000 56,000 $ 84,000 117,000 $1.50 $0.30 Indirect manufacturing labor Supplies S1,008,000 672,000 1.00 0.20 Fixed MOH 571,200 369,600 705,600 $3,326,400 Supervision Utilities 0.85 0.17 47,600 30,800 41,000 55,000 88,800 $355,800 0.55 0.11 58,800 S277,200 Depreciation 1.05 0.21 Total $4.95 $0.99 Annual Manufacturing Overhead Budget 2017 Per Output Unit Monthly MOH Budget May 2017 Actual MOH Total Per DLH Costs for Amount Input Unit May 2017 Variable MOH S 8,000 56,000 $ 84,000 117,000 $1.50 $0.30 Indirect manufacturing labor Supplies S1,008,000 672,000 1.00 0.20 Fixed MOH 571,200 369,600 705,600 $3,326,400 Supervision Utilities 0.85 0.17 47,600 30,800 41,000 55,000 88,800 $355,800 0.55 0.11 58,800 S277,200 Depreciation 1.05 0.21 Total $4.95 $0.99

Answer rating: 100% (QA)

1Total manufacturing overhead allocated 35640... View the full answer