
1.
To prepare: Graph for fixed manufacturing
Given information:
2014,
Budgeted fixed manufacturing overhead cost is $17,000,000.
Budgeted variable manufacturing overhead is $10 per machine hour.
The denominator level is $1,000,000 machine hours.
Budgeted fixed overhead cost per machine hour is
2.
(a)
Variable manufacturing overhead spending and efficiency variances.
Given information:
2014,
Budgeted hours allowed for actual output is 1,125,000.
Actual machine hours are 1,200,000.
Actual variable manufacturing overhead is $12,075,000.
(b)
Fixed manufacturing overhead spending and volume variances.
Given information:
2014,
Budgeted hours allowed for actual output is 1,125,000.
Actual machine hours are 1,200,000.
Actual fixed manufacturing overhead is $17,100,000.
Budgeted fixed overhead rate is $17 (calculated in part 1).
3.
The under or over allocated variable manufacturing overhead and the under or over allocated fixed manufacturing overhead and the reason for flexible
Given information:
2014,
Variable spending variance is $75,000 U (calculated in part B).
Variable efficiency variance is $750,000 U (calculated in part B).
Fixed spending variance is $100,000 U (calculated in part B).
Fixed volume variance is $340,000 F (calculated in part B).
Actual quantity of input used is 1,200,000 hours.
Actual rate is $10.0625.
Budgeted quantity for actual output is $1,125,000.
Budgeted rate is $10.
4.
The effect on the variances due to change in denominator.
Given information:
2014,
Budgeted hours allowed for actual output is 1,125,000.
Actual machine hours are 1,200,000.
Actual fixed manufacturing overhead is $17,100,000.
Denominator is 1,700,000
Budgeted fixed overhead rate is

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