Solution-Compute the variable manufacturing overhead

Compute the variable manufacturing overhead spending

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Reference no: EM13519131

Eastern Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours (DLHs). The denominator activity level is 60,000 direct labor-hours, or 300,000 units.

A standard cost card for the company's product follows:

	Standard quantity or hours	Standard price or rate	Standard cost
Direct materials	0.25 kilogram	$16 per kilogram	$4
Direct labor	0.20 DLH	$10 per DLH	2
Variable overhead	0.20 DLH	$5 per DLH	1
Fixed overhead	0.20 DLH	$10 per DLH	2
Total standard cost			$9

Actual data for the year follow:

Units produced and sold	330,000
Actual direct labor-hours worked	64,800
Actual variable manufacturing overhead cost	$327,240
Actual fixed manufacturing overhead cost	$612,000

Required:

a. Compute the variable manufacturing overhead spending and efficiency variances.

b. Compute the fixed manufacturing overhead budget and volume variances.

Reference no: EM13519131

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Compute the variable manufacturing overhead spending

Reference no: EM13519131

Reference no: EM13519131

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