Edward was working away at his first attempt at variance analysis for his manufacturing company. He filled in variable-and fixed-MOH costs where he saw fit, before actually calculating the related price, efficiency, and volume variances. Since he was focusing on the overhead costs specifically, he made note of the allocation base being used, machine hours. Here is his work so far: Variable-MOH Fixed-MOH Actual Variable- MOH Cost Variable-MOH Flexible Budget Applied Variable- MOH Cost $16,850 $15,550 $15,550 Fixed-MOH Master Budget Applied Fixed- MOH Cost Actual Fixed- MOH Cost $26,950 $26,600 $24,250 Edward isn't sure if he put the right costs in the right places. There were also a couple of costs that he didn't include, because he wasn't sure if they belonged, as follows. Actual machine hours @budgeted variable-MOH rate: $16,000 Flexible budget fixed-MOH cost: $26,950 (b) Your answer is partially correct. Using your corrected framework from part (a), determine the variable-MOH price and efficiency variances. Was variable-MOH under-or overapplied this year? By how much? Variable-MOH price variance $ 850 Unfavorable Variable-MOH efficiency variance $ 1350 Unfavorable Variable-MOH 500 Under-applied

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 18Q
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Edward was working away at his first attempt at variance analysis for his manufacturing company. He filled in variable-and fixed-MOH
costs where he saw fit, before actually calculating the related price, efficiency, and volume variances. Since he was focusing on the
overhead costs specifically, he made note of the allocation base being used, machine hours. Here is his work so far:
Variable-MOH
Fixed-MOH
Actual Variable-
MOH Cost
Variable-MOH
Flexible Budget
Applied Variable-
MOH Cost
$16,850
$15,550
$15,550
Fixed-MOH
Master Budget
Applied Fixed-
MOH Cost
Actual Fixed-
MOH Cost
$26,950
$26,600
$24,250
Edward isn't sure if he put the right costs in the right places. There were also a couple of costs that he didn't include, because he wasn't
sure if they belonged, as follows.
Actual machine hours @budgeted variable-MOH rate: $16,000
Flexible budget fixed-MOH cost: $26,950
(b)
Your answer is partially correct.
Using your corrected framework from part (a), determine the variable-MOH price and efficiency variances. Was variable-MOH
under-or overapplied this year? By how much?
Variable-MOH price variance
$
850
Unfavorable
Variable-MOH efficiency variance $
1350
Unfavorable
Variable-MOH
500
Under-applied
Transcribed Image Text:Edward was working away at his first attempt at variance analysis for his manufacturing company. He filled in variable-and fixed-MOH costs where he saw fit, before actually calculating the related price, efficiency, and volume variances. Since he was focusing on the overhead costs specifically, he made note of the allocation base being used, machine hours. Here is his work so far: Variable-MOH Fixed-MOH Actual Variable- MOH Cost Variable-MOH Flexible Budget Applied Variable- MOH Cost $16,850 $15,550 $15,550 Fixed-MOH Master Budget Applied Fixed- MOH Cost Actual Fixed- MOH Cost $26,950 $26,600 $24,250 Edward isn't sure if he put the right costs in the right places. There were also a couple of costs that he didn't include, because he wasn't sure if they belonged, as follows. Actual machine hours @budgeted variable-MOH rate: $16,000 Flexible budget fixed-MOH cost: $26,950 (b) Your answer is partially correct. Using your corrected framework from part (a), determine the variable-MOH price and efficiency variances. Was variable-MOH under-or overapplied this year? By how much? Variable-MOH price variance $ 850 Unfavorable Variable-MOH efficiency variance $ 1350 Unfavorable Variable-MOH 500 Under-applied
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