8-35 Comprehensive variance analysis. Cooking Whiz manufactures premium food pro

ID: 2518464 • Letter: 8

Question

8-35 Comprehensive variance analysis. Cooking Whiz manufactures premium food processors. The fol- lowing are some manufacturing overhead data for Cooking Whiz for the year ended December 31, 2017: Manufacturing Overhead Variable Fixed Actual Results S 71,808 360,672 Flexible Budget $ 80,640 351,360 Allocated Amount $ 80,640 368,640 Budgeted number of output units: 915 Planned allocation rate: 2 machine-hours per unit Actual number of machine-hours used: 1,632 Static-budget variable manufacturing overhead costs:$76,860 Compute the following quantities (you should be able to do so in the prescribed order): 1. Budgeted number of machine-hours planned 2. Budgeted fixed manufacturing overhead costs per machine-hour 3. Budgeted variable manufacturing overhead costs per machine-hour 4. Budgeted number of machine-hours allowed for actual output produced 5. Actual number of output units 6. Actual number of machine-hours used per output unit

Explanation / Answer

Budgeted number of machine hours planned

no of units planned* machine hours required per unit

915*2

1830

Budgeted fixed manufacturing overhead cost per machine hour

Budgeted fixed manufacturing overheads/no of machine hours

351360/1830

192

Budgeted variable manufacturing overhead cost per machine hour

budgeted variable MOH costs/budgeted number of machine-hours planned

76860/1830

budgeted number of machine hours allowed for actual output produced

flexible budget amount for variable MOH/budgeted variable MOH cost per machine hour

80640/42

1920

actual no of output units

budgeted number of machine-hours allowed for actual output / planned allocation rate of machine hours per unit

1920/2

960

actual no of machine hour used per output unit

actual number of machine hours used /the actual number of units manufactured

1632/960

1.7