Question

The Ramirez Company uses standard costing in its manufacturing plant for auto parts. The standard cost of a particular aut part, based on a denominator level of 4.100 output units per year, included 6 machine-hours of variable manufacturing overhead at $8 per hour and 6 machine-hours of fixed manufacturing overhead at $15 per hour. Actual output produced was 4,500 units. Variable manufacturing overhead incurred was $260,000. Fixed manufacturing overhead incurred was $385,000 Actual machine-hours were 28,500. Read the requirements Journal Entry Date Debit Credit Accounts Fixed Manufacturing Overhead Control Record the actual fixed overhead costs incurred Date Journal Entry Accounts Debit Credit Choose from any list or enter any number in the input fields and then continue to the next question. Save for Later

Answer 1

Answer-1:

The analysis of variable manufacturing overhead: Actual cost incurred: Actual input x Actual rate Actual input Budgeted rate Allocated: Budgeted input for actual output < Budgeted rate (3) - (2) (28,500 × $8) 228,000 $ 260,000 (4,500 x 6 x $8) $ 216,000 $ $32,000 U Spending variance $12,000 U Efficiency variance $44,000 U Flexible Budget variance

The analysis of fixed manufacturing overhead: Actual cost incurred: Actual input x Actual rate Flexible budget: lumpsum regardless of output level Allocated: Budgeted input for actual output Budgeted rate (3) (4,500 x 6* $15) $ 405,000 (1) (2) (4,100 x 6* $15) $ 369,000 385,000 $16,000 U Spending variance $36,000 F prod. Vol. variance $20,000 F over allocated fixed overhead

Answer-2:

Credit Debit 260,000 $ Account Variable overhead control | Account payable and various other accounts (to record the actual overhead cost incurred) $ 260,000 216,000 WIP Control Variable overhead allocated |(to record the actual variable overhead allocated) 216,000 Variable overhead allocated 216,000 32,000 12,000 Variable overhead spending variance Variable overhead efficiency variance Variable overhead control (to record the variance for the accounting period) 260,000

Credit Debit 385,000 $ Account Fixed overhead control Account payable and various other accounts (to record the actual overhead cost incurred) $ 385,000 405,000 WIP Control Fixed overhead allocated (to record the actual variable overhead allocated) 405,000 405,000 16,000 Fixed overhead allocated Fixed overhead spending variance Fixed overhead production volume variance Fixed overhead control (to record the variance for the accounting period) 36,000 385,000