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In: Accounting

The Brown Manufacturing​ Company's costing system has two​ direct-cost categories: direct materials and direct manufacturing labor....

The Brown Manufacturing​ Company's costing system has two​ direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead​ (both variable and​ fixed) is allocated to products on the basis of standard direct manufacturing labor hours​ (DLH). At the beginning of

2014 Brown adopted the following standards for its manufacturing​ costs: 

Direct materials

3 lbs. at $4 per lb.

$12.00

Direct manufacturing labor

4 hrs. at $20 per hr.

80.00

Manufacturing overhead:

Variable

$6 per DLH

24.00

Fixed

$7 per DLH

28.00

Standard manufacturing cost per output unit

$144.00

The denominator level for total manufacturing overhead per month in

2014 is 37,000 direct manufacturing​ labor-hours

Brown​'s flexible budget for January 2014

was based on this denominator level. The records for January indicated the​ following:

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Direct materials purchased

26,300 lb. at $3.80 per lb.

Direct materials used

23,300 lb.

Direct manufacturing labor

28,400 hrs. at $19.60 per hr.

Total actual manufacturing overhead (variable and fixed)

$500,000

Actual production

7,600 output units

Next, complete the table for variable overhead.

Actual Input Qty.

Actual Costs

x

Flexible

Allocated

Incurred

Budgeted Price

Budget

Overhead

Variable Manuf. OH

Solutions

Expert Solution

Actual Cost Incurred Actual Input Qty. X Budgeted Rate Flexible Budget (Budgeted Input Qty Allowed for Actual Output X Budgted Rate) Allocated (Budgeted Input Qty Allowed for Actual Ouput X Budgeted rate)
Variable Manufact. Overhead No Given 28,400 Hrs X $6 30,400 Hrs X $6 per Hrs 30,400 Hrs X $6 per Hrs
$                     170,400.00 $                                   182,400.00 $                                 182,400.00
Efficiency Variance = $12,000 (U)
Never A Variance

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