Question

	Input	Cost per Output Unit
Direct materials	2 lbs. at $6 per lb.		$12.00
Direct manufacturing labor	7 hrs. at $18 per hr.		126.00
Manufacturing overhead:
Variable	$7 per DLH		49.00
Fixed	$9 per DLH		63.00
Standard manufacturing cost per output unit			$250.00

The denominator level for total manufacturing overhead per month in 2014 is 38,000 direct manufacturing​ labor-hours.

Barrett​'s flexible budget for January 2014 was based on this denominator level. The records for January indicated the​ following:

Direct materials purchased	19,000 lb. at $5.80 per lb.
Direct materials used	16,500 lb.
Direct manufacturing labor	58,200 hrs. at $18.50 per hr.
Total actual manufacturing overhead (variable and fixed)	$600,000
Actual production	8,600 output units

Actual Input Qty. Actual Costs Flexible х Budgeted Price Incurred Budget 1076700 1047600 703000 Direct Manuf. Labor c. The direct manufacturing labor price variance is $ d. The direct manufacturing labor efficiency variance is $ Next, complete the table for variable overhead. Actual Input Qty. Actual Costs Flexible Allocated х Incurred Budgeted Price Budget Overhead Variable Manuf. OH Finally, complete the table for fixed overhead. Same Budgeted Lump Sum Regardless Actual Costs Flexible Allocated of Output Level Incurred Budget Overhead Fixed Manuf. OH e. The total manufacturing overhead spending variance is $ f. The variable manufacturing overhead efficiency variance is $ g. The production-volume variance is $

Answer 1

	Actual cost incurred	Actual input qty $\times$ Budgeted price	Flexible budget
Direct manuf. labor	$1,076,700	58,200*$18 $1,047,600	8,600*7*$18 1,083,600
Total direct manufacturing labor price variance ($1,076,700-1,047,600) = $29,100 U
Total direct manufacturing labor efficiency variance ($1,083,600-1,047,600) = $36,000 F

	Actual cost incurred	Actual input qty $\times$ Budgeted price	Flexible budget	Allocated overhead
Variable manuf. overhead		58,200*$7 $407,400	8,600*7*$7 $421,400	$421,400
	Actual cost incurred	Same budgeted lumpsum regardless of output level	Flexible budget	Allocated overhead
Fixed manuf. overhead		38,000*$9 $342,000	8,600*7*$9 $541,800	$541,800
Total manufacturing overhead spending variance $421,400+541,800 - 600,000 = $363,200 F
Variable manufacturing overhead efficiency variance = $421,400 - 407,400 = $14,000 F
Production volume variance = $342,000 - 541,800 = $199,800 F