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ACC - Mifflin Corporation

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Question;Mifflin Corporation manufactures a single product. The standard cost per unit of product is shown below.Direct materials-1 pound plastic at $7.00 per pound$ 7.00Direct labor-1.6 hours at $11.80 per hour18.88Variable manufacturing overhead11.083.68Fixed manufacturing overhead$40.64Total standard cost per unitThe predetermined manufacturing overhead rate is $9.23 per direct labor hour ($14.76 1.6). It was computed from a master manufacturing overhead budget based on normal production of 7,840 direct labor hours (4,900 units) for the month. The masterbudget showed total variable costs of $535,460 ($7.40 per hour) and total fixed overhead costs of $195,370 ($2.70 per hour).Actual costs for October in producing 4,810 units were as follows.Direct materials (4,990 pounds)$ 36,926Direct labor (7,520 hours)93,248Variable overhead54,49718,903Fixed overheadTotal manufacturing costs$203,574The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Rawmaterials inventories, therefore, can be ignored.InstructionsCompute all of the materials, labor, and total overhead variances. (Round computations and final answers to 0 decimal places,e.g. 125.)Total materials variance$Materials price variance$Materials quantity variance$Total labor variance$Labor price variance$Labor quantity variance$Total overhead variance$Click here if you would like to Show Work for this questionMy solution to the Total overhead varianceTo fond out Total overhead variance, we arerequired to calculateActual Overhead that is given to us:54,497+18,903=73,400Applied Overhead is calculated by multiplyingstandard hours by standard per hour overheadcost (4,810 units*1.6 hours per unit)=>7,696standard hours * $10.10 standard per hour laborOH cost => (Variable OH of $7.40 + fixed OH$2.70) =77,730 =>That is: 73,400 of actual OH & 77,730 ofapplied OH => 4,330 Fsince actual OH came lower than applied OH.

 

Paper#38950 | Written in 18-Jul-2015

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