Actual number of machine hours used per output unit SOLUTION 30 min

# Actual number of machine hours used per output unit

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6.Actual number of machine-hours used per output unitSOLUTION(30 min.) Comprehensive variance analysis. 3.Budgeted variable MOH costs per machine-hour are calculated as budgeted variable MOH costs divided by the budgeted number of machine-hours planned:
4. The actual number of machine-hours used per output unit is the actual number ofmachine hours used (given) divided by the actual number of units manufactured:1,632 machine-hours ÷ 960 units = 1.7 machine-hours used per output unit.8-36Journal entries (continuation of 8-35).Required:1.Prepare journal entries for variable and fixed manufacturing overhead (you will need tocalculate the various variances to accomplish this).2.Overhead variances are written off to the Cost of Goods Sold (COGS) account at the end ofthe fiscal year. Show how COGS is adjusted through journal entries.SOLUTION(60 min.) Journal entries (continuation of 8-35).1.Key information underlying the computation of variances is:ActualResultsFlexible-BudgetAmountStatic-BudgetAmount1. Output units (food processors)9609609152. Machine-hours1,6321,9201,8303. Machine-hours per output unit1.702.00 2.004. Variable MOH costs\$71,808\$80,640\$76,8605. Variable MOH costs per machine-hour (Row 4 ÷ Row 2)\$44.00\$42.00 \$42.006. Variable MOH costs per unit(Row 4 ÷ Row 1)\$74.80\$84.00 \$84.007. Fixed MOH costs\$360,672\$351,360\$351,3608. Fixed MOH costs per machine-hour (Row 7 ÷ Row 2)\$221.00\$183.00 \$192.009. Fixed MOH costs per unit (Row 7 ÷Row 1)\$375.70\$366.00\$384.008-0
Solution Exhibit 8-36 shows the computation of the variances.Journal entries for variable MOH, year ended December 31, 2017:Variable MOH Control71,808Accounts Payable Control and Other Accounts71,808Work-in-Process Control80,640Variable MOH Allocated80,640Variable MOH Allocated80,640Variable MOH Spending Variance3,264Variable MOH Control71,808Variable MOH Efficiency Variance12,096Journal entries for fixed MOH, year ended December 31, 2017:Fixed MOH Control360,672Wages Payable, Accumulated Depreciation, etc.360,672Work-in-Process Control368,640Fixed MOH Allocated368,640Fixed MOH Allocated368,640Fixed MOH Spending Variance9,312Fixed MOH Control360,672Fixed MOH Production-Volume Variance17,2802.Adjustment of COGSVariable MOH Efficiency Variance12,096