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It was the end of the first quarter, and Kimberly was evaluating the company's manufacturing overhead cost situation. She recalled the heated discussions during the budget meetings at the end of the prior year as managers thoroughly considered their options. The resulting annual budgeted variable-MOH cost of $46,500 and budgeted fixed-MOH cost of $55,800 support a planned volume of 6,200 units. Standards were also set at that time for the cost driver, machine hours, where each unit should use 1.25 machine hours. At the end of this first quarter, the company had used 2,064 machine hours in its production of 1,600 units. Actual variable-MOH costs incurred thus far were $11,662, and total fixed-MOH costs thus far totaled $13,210.

It was the end of the first quarter, and Kimberly was evaluating the company's manufacturing overhead cost situation. She recalled the heated discussions during the budget meetings at the end of the prior year as managers thoroughly considered their options. The resulting annual budgeted variable-MOH cost of $46,500 and budgeted fixed-MOH cost of $55,800 support a planned volume of 6,200 units. Standards were also set at that time for the cost driver, machine hours, where each unit should use 1.25 machine hours. At the end of this first quarter, the company had used 2,064 machine hours in its production of 1,600 units. Actual variable-MOH costs incurred thus far were $11,662, and total fixed-MOH costs thus far totaled $13,210.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter5: Product And Service Costing: Job-order System
Section: Chapter Questions
Problem 27P: Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming...
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(c1) Determine the fixed-MOH price and volume variances for this first quarter. Fixed-MOH price variance Fixed-MOH volume variance e Textbook and Media
Transcribed Image Text:(c1) Determine the fixed-MOH price and volume variances for this first quarter. Fixed-MOH price variance Fixed-MOH volume variance e Textbook and Media
It was the end of the first quarter, and Kimberly was evaluating the company's manufacturing overhead cost situation. She recalled the heated discussions during the budget meetings at the end of the prior year as managers thoroughly considered their options. The resulting annual budgeted variable-MOH cost of $46,500 and budgeted fixed-MOH cost of $55,800 support a planned volume of 6,200 units. Standards were also set at that time for the cost driver, machine hours, where each unit should use 1.25 machine hours. At the end of this first quarter, the company had used 2,064 machine hours in its production of 1,600 units. Actual variable-MOH costs incurred thus far were $11,662, and total fixed-MOH costs thus far totaled $13,210.
Transcribed Image Text:It was the end of the first quarter, and Kimberly was evaluating the company's manufacturing overhead cost situation. She recalled the heated discussions during the budget meetings at the end of the prior year as managers thoroughly considered their options. The resulting annual budgeted variable-MOH cost of $46,500 and budgeted fixed-MOH cost of $55,800 support a planned volume of 6,200 units. Standards were also set at that time for the cost driver, machine hours, where each unit should use 1.25 machine hours. At the end of this first quarter, the company had used 2,064 machine hours in its production of 1,600 units. Actual variable-MOH costs incurred thus far were $11,662, and total fixed-MOH costs thus far totaled $13,210.
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