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The following data relate to factory overhead cost for the production of 6,000 computers: Actual: Variable...

The following data relate to factory overhead cost for the production of 6,000 computers:

Actual: Variable factory overhead $152,800 Fixed factory overhead 37,500 Standard: 6,000 hrs. at $30 180,000 If productive capacity of 100% was 10,000 hours and the total factory overhead cost budgeted at the level of 6,000 standard hours was $195,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $3.75 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variance Amount Favorable/Unfavorable

Variable factory overhead controllable variance

Fixed factory overhead volume variance

Total factory overhead cost variance

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Answer:
Variable factory overhead controllable variance
       =   Actual variable factory overhead   (-) Budgeted Variable factory overhead
       =   $152,800 (-) 6,000 x ($30 (-) $3.75)
       =   $152,800 (-) $157,500
       = ($4,700) (Favourable)
Variable factory overhead controllable variance   =   $4,700 (Favourable)
Fixed factory overhead volume variance
    = Fixed factory overhead rate x ( Standard Hours at 100% (-) Standard Actual Hours)
    = $3.75 x ( 10,000hours (-) 6,000 hours)
    = $3.75   x 4,000 Hours
    =   $15,000 (unFavourable)
Fixed factory overhead volume variance     = $15,000 (UnFavourable)
Total factory overhead cost variance  
     =     Variable factory overhead controllable variance (+)
                 Fixed factory overhead volume variance
     =   ($4,700) (Favourable)   + $15,000 (unFavourable)
     =     $10,300 (unFavourable)
Total factory overhead cost variance    =     $10,300 (unFavourable)

ekkarill92 answered 2 years ago
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