Annual Manufacturing Overhead Budget 2017 Monthly MOH Budget May 2017 Actual MOH Costs for Per Total Output Unit Per DLH Input Unit Amount May 2017 Variable MOH $ 84,000 $ 84,000 $1,008,000 Indirect manufacturing labor Supplies $1.50 $0.30 1.00 672,000 0.20 56,000 117,000 Fixed MOH Supervision 41,000 571,200 0.85 0.17 47,600 Utilities 369,600 30,800 0.55 0.11 55,000 Depreciation Total 705,600 1.05 0.21 58,800 88,800 $3,326,400 $4.95 $0.99 $277,200 $355,800

Flexible budgets, 4-variance analysis. (CMA, adapted) Wilson Products uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labor-hours (DLH). Wilson Products develops its manufacturing overhead rate from the current annual budget. The manufacturing overhead budget for 2017 is based on budgeted output of 672,000 units, requiring 3,360,000 DLH. The company is able to schedule production uniformly throughout the year.

A total of 72,000 output units requiring 321,000 DLH was produced during May 2017. Manufacturing overhead (MOH) costs incurred for May amounted to $355,800. The actual costs, compared with the annual budget and 1/12 of the annual budget, are as follows:

Calculate the following amounts for Wilson Products for May 2017:

1. Total manufacturing overhead costs allocated
2. Variable manufacturing overhead spending variance
3. Fixed manufacturing overhead spending variance
4. Variable manufacturing overhead efficiency variance
5. Production-volume variance

Be sure to identify each variance as favorable (F) or unfavorable (U).