Problem B Jazzy Jeans applies manufacturing overhead using machine hours as the
ID: 2487716 • Letter: P
Question
Problem B
Jazzy Jeans applies manufacturing overhead using machine hours as the cost driver.
Fixed MOH costs are budgeted at $1,000,000 per month.
Variable MOH costs are budgeted at $52.80 per machine hour.
It takes .25 machine hours to produce a pair of jeans.
Jazzy budgeted production of 10,000 pairs of Jeans in December.
Actual activity in December:
Total Variable MOH Costs 134,767.50
Total Fixed MOH Costs 988,000.00
Actual pairs of jeans made 10,500
Actual machine hours 2,550
5. What was the variable overhead spending variance for the month?
6. What was the variable overhead efficiency variance for the month?
7. How much fixed MOH was applied in December?
8. What was the fixed overhead spending variance for the month?
9. What was the fixed overhead volume variance for the month?
Show your work in all your answers.
Please can I have your help.... Thank you sooo much....
Explanation / Answer
Variable overhead spending variance= Actual hours worked x (Actual overhead rate - standard overhead rate) Actual hours worked 2,550 Actual overhead rate 53.0 standard overhead rate 52.8 Variable overhead spending variance 510.00 Actual overhead for the month Total Variable MOH Costs 134,767.50 Machine hours 2,550 Actual overhead rate 53 variable overhead efficiency variance= Standard overhead rate x (Actual hours - standard hours) standard overhead rate 52.8 Actual hours worked 2,550 Standard hours 2,500 (10000*.25) variable overhead efficiency variance 2,640 fixed MOH applied in december Total Fixed MOH Costs 988,000 Fixed MOH applied= 968,627 988000/2550*2500 fixed overhead spending variance=Actual fixed overhead - Budgeted fixed overhead Actual fixed overheads 988,000 Budegeted fixed overheads 1,000,000 fixed overhead spending variance (12,000) fixed overhead volume variance= Absorbed Fixed overheads-Budgeted Fixed Overheads Absorbed Fixed Overheads 968,627 Budegeted fixed overheads 1,000,000 fixed overhead volume variance= (31,373)
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