Question

*can someone please explain/show me the process of this problem? Thanks in advance!

1. Mary Corporation uses standard costing in its manufacturing of tractor parts. The standard cost of a particular part, based on the denominator level of 4,500 output units per year, included 7 machine hours of variable manufacturing overhead at $6.00 per hour, and 7 machine hours of fixed manufacturing overhead at $10.00 per hour. Actual output produced was 4,310 units. Variable manufacturing overhead incurred was $190,000. Fixed manufacturing overhead incurred was $320,000. Actual machine hours were 30,000. Required:
   1. Compute the following variances:
      1. VMO Spending Variance            $10,000U
      2. VMO Efficiency Variance            $1,020 F
      3. FMO Budget Variance                 $5,000U
      4. FMO Volume Variance                $13,300 U
   2. Show the compound journal entry to record these variances

Answer 1

a-i	Variable OH Spending Variance	(Actual variable OH Cost per unit of cost allocation base-Budgeted variable OH cost per unit of cost allocation base)*Actual qty of variable OH cost allocation base used for actual output
		(190000/30000-6)*30000
		$ 10000 U
ii	Variable OH Efficiency Variance	(Actual Qty of variable OH cost allocation base used for actual output-Budgeted qty of variable oh cost allocation allowed for actual output)*Budgeted variable OH cost per unit
		(30000-7*4310)*6
		1020 F
iii	Fixed OH Flexible Budget Variance	Actual Cost Incurred-Flexible Budget Amount
		320000-4500*7*10
		320000-315000
		5000 U
iv	Fixed OH Volume Variance	Budgeted FOH-Fixed OH allocated for actual Output units produced
		315000-4310*10*7
		315000-301700
		13300 U
b	Journal Entries
Date	Account Title	Amount	Amount
	WIP Control	181020
	Variable OH allocated		181020
	to record the variable oh Cost allocated 4310 units*7 hrs*6 Per hr.The costs accumulated in WIP control are transferred to finished goods control when production is completed and to cost of goods sold when product are sold
	Variable OH allocated	181020
	Variable OH Efficiency Variance		1020
	Variable OH spending Variance	10000
	Variable OH Control		190000
	to record the variances for the accounting period
	WIP Control	301700
	Fixed OH allocated		301700
	to record the variable oh Cost allocated 4310 units*7 hrs*10 Per hr.The costs accumulated in WIP control are transferred to finished goods control when production is completed and to cost of goods sold when product are sold
	Fixed OH allocated	301700
	Fixed OH Volume Variance	13300
	Fixed OH spending Variance	5000
	Fixed OH Control		320000
	to record variances for the accounting period