The Brown Manufacturing Companys costing system allocates both variable and fixed manufacturing overhead to products...
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Accounting
The Brown Manufacturing Companys costing system allocates both variable and fixed manufacturing overhead to products on the basis of standard direct manufacturing labor hours (DLH). At the beginning of 2022, Brown adopted the following standards related to overhead with fixed manufacturing overhead budgeted to be $939,600:
Input | Cost per Output Unit | |
Variable manufacturing overhead | 4 hours at $12 per DLH | $48.00 |
Fixed manufacturing overhead | 4 hours at $29 per DLH | $116.00 |
The denominator level for total manufacturing overhead per month in 2022 is 32,400 direct manufacturing labor hours. Browns budget for January 2022 was based on this denominator level. The records for January indicated the following:
Actual direct manufacturing labor 31,400 hours at $16.25 per hour
Actual variable manufacturing overhead $ 363,800
Actual fixed manufacturing overhead $ 956,000
Actual production 7,950 units
a. Compute the variable manufacturing overhead spending variance
b. Compute the variable manufacturing overhead efficiency variance
c. Compute the fixed manufacturing overhead spending variance
d. Compute the production volume variance
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