STANDARD COST SYSTEM – MOH VARIANCES (must show calculations)
Company budgeted production level in units is 60,000 units of output with a budgeted fixed cost of $480,000 and budgeted variable cost of $348,000. Each unit requires 2 hours of direct labor. (Use T accounts to help yourself)
Actual results:
Production: 58,500 units
Direct labor hours used: 128,700
Total actual MOH costs incurred: $819,228
Total actual FIXED MOH costs incurred: $480,643
- Calculate the standard (budgeted) VMOH cost per unit and per hour:
VMOH per unit: $__________________
VMOH per hour: $_________________
- Calculate the standard (budgeted) FMOH cost per unit and per hour:
FMOH per unit: $___________________
FMOH per hour: $___________________
- Calculate the standard VMOH allocated to production during the year and prepare journal entry:
VMOH Allocated: $_____________________
- Calculate the standard FMOH allocated to production during the year and prepare journal entry:
FMOH Allocated $_______________________
MOH VARIANCES (indicate whether favorable (F) or unfavorable (U):
5A. Calculate the total VMOH variance:
Total VMOH VAR. $__________
5B. Calculate the VMOH spending (price) variance:
VMOH Spending Var.: $_____________U F
5C. Calculate the VMOH efficiency (quantity) variance:
VMOH Efficiency Var.: $____________U F
6A Calculate the total FMOH variance:
Total FMOH VAR. $________
6B Calculate FMOH Spending variance:
FMOH Spending Var.: $____________U F
6C Calculate FMOH Volume variance:
FMOH Volume Var.: $_____________U F