Susan, the manager of Splish Brothers, is analyzing the companys MOH costs from last year. Splish Brothers
Question:
Susan, the manager of Splish Brothers, is analyzing the company’s MOH costs from last year. Splish Brothers had always followed an actual costing system when determining the costs of its customizable telescopes. Susan wondered if it would be better to switch to a normal costing system, as she had heard a number of people talking about that at an industry conference she attended the previous month.
Since Splish Brothers has a highly machine-intensive operation, machine hours are used as its MOH cost driver. Here are the costs and other MOH information Susan is analyzing:
Budgeted MOH cost $434,560
Actual MOH cost 427,280
Budgeted machine hours 97.000
Actual machine hours 109.000
Calculate total applied MOH under both actual costing and normal costing for last year.
Total applied MOH
Actual costing $
Normal costing $
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins