Question

Spreadsheet Assignment #3 Standard Costing

Please use the information provided to complete requirements 1-5 addressing standard costing. MOH is allocated using Machine hours.

1. Compute the variances for the direct manufacturing costs;
2. Compute the variances for the indirect manufacturing costs;
3. Provide the entries to record the direct cost variances;
4. Provide the entries to record the incurrence of actual VMOH and FMOH, the allocation of VMOH and FMOH, and the variances for VMOH and FMOH;
5. Provide the entry to make an adjustment to CGS.

The assignment should consist of four separate sheets in the excel file:

1. a facts sheet with row and column headings;
2. a sheet for requirement 1 with row and column headings;
3. a sheet for requirement 2 with row and column headings;
4. a sheet showing the entries for requirements 3-5.

Format the numbers in the sheets with numbers with comas (1,000,000) and dollar signs if the unit of measure is in dollars

BUDGETED
Direct Materials	5.00	lbs. per unit	$30.00	per lbs.
Direct Labor	2.00	hours per unit	$25.00	per hour
VMOH	$3,200,000
FMOH	$5,600,000
MHRS	80,000	MHRS
Production volume	40,000	units
Allocation base	MHRS
ACTUAL
Direct Materials	4.50	lbs. per unit	$32.00	per lbs.
Direct Labor	2.50	hours per unit	$22.00	per hour
VMOH	$3,192,000
FMOH	$5,300,000
MHRS	84,000	MHRS
Production volume	35,000	units

Answer 1

Variable Overhead Cost Variance
Actual Cost			Standard cost for actual quantity			Standard Cost
AH*	AR =				AH*	SR =				SH *	SR =
84000	$38.00	$3,192,000.00			84000	$40.00	$3,360,000.00			70000	$40.00	$2,800,000.00
	$168,000.00	F				$560,000.00	U
			Variable overhead rate Variance					Variable overhead efficiency variance
Variable overhead spending variance	$168,000.00	F
Variable overhead efficiency variance	$560,000.00	U
Variable overhead cost variance	$392,000.00	U

Fixed Overhead Cost Variance

Actual Fixed OH Cost

Budgeted Fixed Overhead

Standard Cost (FOH Applies)

SH*

BR

$5,300,000.00

$5,600,000.00

70000

$70.00

$4,900,000.00

$300,000.00

F

$700,000.00

U

Fixed overhead Budget Variance

Fixed overhead volume variance

Fixed overhead Budget Variance

$300,000.00

F

Fixed overhead volume variance

$700,000.00

U

Total Fixed overhead variance

$400,000.00

U