Problem
The Rotations Corporation is a manufacturer of centrifuges. Fixed and variable manufacturing overheads are allocated to each centrifuge using budgeted? assembly-hours. Budgeted assembly time is 2 hours per unit. The following table shows the budgeted amounts and actual results related to overhead for June 2014.
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Actual
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Static
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The Rotations Corporation (June 2014)
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Results
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Budget
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Number of centrifuges assembled and sold
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240
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190
|
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Hours of assembly time
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312
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|
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Variable manufacturing overhead cost per hour of assembly time
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$28.00
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Variable manufacturing overhead costs
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$9,148
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|
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Fixed manufacturing overhead costs
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$19,990
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$18,620
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Requirements
1. Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead variances.
2. Prepare journal entries for Rotations' June 2014 variable and fixed manufacturing overhead costs and variances; write off these variances to cost of goods sold for the quarter ending June? 30,2014.
3. How does the planning and control of variable manufacturing overhead costs differ from the planning and control of fixed manufacturing overhead costs?