The following information was taken from the annual manufacturing overhead cost budget of Cinnamon Manufacturing: Variable manufacturing overhead costs $ 186 , 000 Fixed manufacturing overhead costs $ 124 , 000 Normal production level in direct labor hours 62 , 000 Normal production level in units 31 , 000 \begin{array}{lr} ext { Variable manufacturing overhead costs } & \$ 186,000 \ ext { Fixed manufacturing overhead costs } & \$ 124,000 \ ext { Normal production level in direct labor hours } & 62,000 \ ext { Normal production level in units } & 31,000\end{array} Variable manufacturing overhead costs Fixed manufacturing overhead costs Normal production level in direct labor hours Normal production level in units $186 , 000 $124 , 000 62 , 000 31 , 000 During the year 30000 units were produced 64000 hours were worked and the actual manufacturing overhead costs were $322000. The actual fixed manufacturing overhead costs did not deviate from the budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours.Instructions(a) Compute the total fixed and variable predetermined manufacturing overhead rates.(b) Compute the total controllable and volume overhead variances.

Question

The following information was taken from the annual manufacturing overhead cost budget of Cinnamon Manufacturing:    Variable manufacturing overhead costs  $ 186 , 000  Fixed manufacturing overhead costs  $ 124 , 000  Normal production level in direct labor hours  62 , 000  Normal production level in units  31 , 000 \begin{array}{lr}	ext { Variable manufacturing overhead costs }  &  \$ 186,000 \	ext { Fixed manufacturing overhead costs }  &  \$ 124,000 \	ext { Normal production level in direct labor hours }  &  62,000 \	ext { Normal production level in units }  &  31,000\end{array}  Variable manufacturing overhead costs   Fixed manufacturing overhead costs   Normal production level in direct labor hours   Normal production level in units  ​ $186 , 000 $124 , 000 62 , 000 31 , 000 ​   During the year 30000 units were produced 64000 hours were worked and the actual manufacturing overhead costs were $322000. The actual fixed manufacturing overhead costs did not deviate from the budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours.Instructions(a) Compute the total fixed and variable predetermined manufacturing overhead rates.(b) Compute the total controllable and volume overhead variances.

Hemashi Rajapaksha Vithanage · Accepted Answer

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