It was the end of the first quarter, and Sharon was evaluating the company’s manufacturing overhead cost situation. She…

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It was the end of the first quarter, and Sharon was evaluating the company’s manufacturing overhead cost situation. She recalled the

heated discussions during the budget meetings at the end of the prior year as managers thoroughly considered their options. The

resulting annual budgeted variable-MOH cost of $34,800 and budgeted fixed-MOH cost of $55,100 support a planned volume of

5,800 units. Standards were also set at that time for the cost driver, machine hours, where each unit should use 1.25 machine hours.

At the end of this first quarter, the company had used 1.920 machine hours in its production of 1,500 units. Actual variable-MOH costs

incurred thus far were $8,640, and total fixed-MOH costs thus far totaled $13,344.

(a)

Calculate the budgeted variable-MOH rate per machine hour and standard variable-MOH cost per unit. Do the same for fixed-

MOH. (Round answers to 2 decimal places, e.g. 15.25.)

Budgeted MOH rates for the year

Standard cost cards

+A

Variable-MOH

Fixed-MOH Determine the fixed-MOH price and volume variances for this first quarter.

Fixed-MOH price variance $

Fixed-MOH volume variance $

Expert Answer:

Answer rating: 100% (QA)

To calculate the budgeted variable MOH rate per machine hour divide the budgeted variable MOH cost b

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