Annual Manufacturing Overhead Budget 2017 Monthly MOH Budget May 2017 Actual MOH Costs for Per Total Output Unit Per DLH Input Unit Amount May 2017 Variable MOH $ 84,000 $ 84,000 $1,008,000 Indirect manufacturing labor Supplies $1.50 $0.30 1.00 672,000 0.20 56,000 117,000 Fixed MOH Supervision 41,000 571,200 0.85 0.17 47,600 Utilities 369,600 30,800 0.55 0.11 55,000 Depreciation Total 705,600 1.05 0.21 58,800 88,800 $3,326,400 $4.95 $0.99 $277,200 $355,800
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Flexible
A total of 72,000 output units requiring 321,000 DLH was produced during May 2017. Manufacturing overhead (MOH) costs incurred for May amounted to $355,800. The actual costs, compared with the annual budget and 1/12 of the annual budget, are as follows:
Calculate the following amounts for Wilson Products for May 2017:
- Total
manufacturing overhead costs allocated - Variable manufacturing overhead spending variance
- Fixed manufacturing overhead spending variance
- Variable manufacturing overhead efficiency variance
- Production-volume variance
Be sure to identify each variance as favorable (F) or unfavorable (U).
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