Question

Use the following information to answer questions 1-3.

Christine Corporation manufactures baseball uniforms and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information pertains to the company’s manufacturing overhead data:

Budgeted Output Units ---------------------- 10,000 units
Budgeted Machine-Hours ------------------- 15,000 hours
Budgeted Variable Manufacturing
Overhead Costs for 15,000 hours --------- 180,000
Actual Output Unites Produced ----------- 9,000 units
Actual Machine-Hours Used --------------- 14,000 hours
171,000

1. What is the budgeted variable overhead cost rate per output unit?

A. $12.00
B. $12.21
C. $18.00
D. $19.00
2. What is the variable overhead spending variance? (using data from question 1)
A. $3,000 U
B. $6,000 U
C. $12,000 F
D. $81,000 U

3. If the company uses standard costing, what amounts of variable manufacturing overhead was allocated to the work-in-process for the period?
A. $180,000
B. $171,000
C. $168,000
D. $162,00

Answer 1

Instructions are listed below.

Step-by-step explanation:

Giving the following information:

Christine Corporation manufactures baseball uniforms and uses budgeted machine-hours to allocate variable manufacturing overhead.

Budgeted Machine-Hours= 15,000 hours

Overhead Costs for 15,000 hours= 180,000

1) To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 180,000/15,000=$12 per machine hour

2) Manufacturing overhead spending variance= (standard rate - actual rate)* actual quantity

Manufacturing overhead spending variance= (12 - 180,000/14,000)*14,000

Manufacturing overhead spending variance= $12,000 unfavorable

3) Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 12*14,000= $168,000