Question

Question 9

• Time: 28 minutes
• Total: 20 marks

For the Win (FTW) Corporation uses a standard costing system in the creation of awards and trophies. The Manufacturing overhead costs are applied to products based on machine time.

Required:

1. Unfortunately, due to accounting glitches in FTW’s software, several numbers and labels have been omitted from the analysis of fixed overhead below. Supply the missing numbers and labels to help FTW out: (10 marks)

Actual Fixed Overhead Cost	Flexible Budget Overhead Cost	Fixed Overhead Cost Applied to Work in Process
(a)	(b)	302,700 MH x $1.2 = (c)
	Budget variance, $3,020 U	(d)
	Total variance, $820 F	(e)

2. Next, assume that 6 minutes of machine time is standard per unit of production. How many units were produced in the situation above?    (5 marks)

3. Once again, assume that 6 minutes of machine time is standard per unit of production. How many units of production were assumed when the predetermined application rate for fixed overhead was established? (5 marks)

Answer 1

Actual fixed overhead lost a $362,420 Budget variance Total : WIP flexible Buckefel overheed case fixed overhead cost applied Ib) 9351 1400 10 302, Yoo* 31.2 =.5363,240 33020 u a) volume variance 820 F 82 83,840 2) Budget varjaneet volume variance F variance units pod produced (standard machine | I hours Flotal minutes 202, You 18,162,000 Islandeird time per Unit 6 minute unit produced 8,027,000

93,020 u $ 820 F Budget variance Total variance volume variance Budgeted overheads Budget variance Actual overheids 33,840 $ 3.54,400 9'3,020 $362,420 4-62 $363,240 30 2,700* 91.2 Appliced overheads volume variance Budgeted overheads $ 3,840 f 3354,400 Budgeted units I Machine horrale 9.1.20 299,500.12$ 359,400/$1.20 17,940,000 Budgeted machine hours Budgeted minutes Standard time per unit Budgeteelunits 6 minte minute 2,995,000