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ruskin ruskin
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6 years ago
The Saskatchewan division of a Canadian farm machinery company uses a standard cost system for its machine-based production of grain drying equipment. Data regarding production for April are as follows:

   Variable manufacturing overhead costs incurred   $ 549,600
   Variable manufacturing overhead costs allocation rate   $750    per machine hour
   Fixed manufacturing overhead costs incurred   $86,500
   Fixed manufacturing overhead budgeted   $90,000
   Denominator level machine hours   800   hours   
   Standard machine hours allowed per unit of output   40   hours   
   Units produced   22   units   
   Actual machine-hours used   820   hours   
   Ending work-in-process inventory   nil

Required:
1.   Prepare the necessary journal entries to account for the fixed manufacturing overhead incurred and allocated to production.
2.   Prepare the journal entry to close the fixed overhead variance accounts assuming that the fluctuation in denominator level is considered to be normal.
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
Authors:
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GarretAGarretA
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Without mathematics, there's nothing you can do. Everything around you is mathematics. Everything around you is numbers.

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ruskin Author
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6 years ago
Good timing, thanks!
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