Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed



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solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1



Actual costs
incurred



Actual input
× Budgeted price
Flexible budget
(Budgeted input
allowed for actual
output achieved
× Budgeted price)
(12,050 hours × SKr 16.80)
SKr202,440
*
(12,050 hours × SKr16.00
*
)
SKr192,800
(11,750 hours × SKr16.00
*
)
SKr188,000

SKr9,640 U
*

SKr4,800 U Price variance Efficiency variance


SKr14,440 U


Flexible-budget variance


Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
Manufacturing Overhead
Variable-overhead rate = SKr 64,000
*
÷ 8,000
*
hours = SKr 8.00 per standard labour- hour Budgeted fixed overhead costs = SKr 197,600
*
− 10,000
×
(SKr 8.00) = SKr 117,600 If total manufacturing overhead is allocated at 120% of direct standard manufacturing labour-hours, the single overhead rate must be 120% of SKr 16.00 or SKr 19.20 per hour. Therefore, the fixed-overhead component of the rate must be SKr 19.20 – SKr
8.00, or SKr 11.20 per direct standard manufacturing labour-hour. Let D = denominator level in input units Budgeted fixed overhead rate per input unit Budgeted fixed overhead costs
Denominator level in input units SKr
11.20
= DD standard direct manufacturing labour-hours A summary variance analysis for October follows

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