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Presented Below Is a Flexible Manufacturing Budget for Ganem Manufacturing

question 32

Essay

Presented below is a flexible manufacturing budget for Ganem Manufacturing which manufactures fine timepieces:
The company applies the overhead on the basis of direct labor hours at $7.00 per direct labor hour and the standard hours per timepiece is 1/2 hour each. The company's actual production was 5400 timepieces with 2700 actual hours of direct labor. Normal capacity is 3200 hours. Actual overhead was $20200.
Instructions
(a) Compute the controllable and volume overhead variances.
(b) Prepare the entries for manufacturing overhead during the period and the entry to recognize the overhead variances at the end of the period.


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