In: Accounting
Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches
Branch Company provided the following information:
Standard fixed overhead rate (SFOR) per direct labor hour | $5.00 | ||
Actual fixed overhead | $305,000 | ||
BFOH | $300,000 | ||
Actual production in units | 16,000 | ||
Standard hours allowed for actual units produced (SH) | 64,000 |
Required
Enter amounts as positive numbers and select Favorable (F) or Unfavorable(U).
1. Using the columnar approach, calculate the fixed overhead spending and volume variances.
(1) | (2) | (3) |
Spending | Volume |
2. Using the formula approach, calculate the fixed overhead spending variance.
$
3. Using the formula approach, calculate the fixed overhead volume variance.
$
4. Calculate the total fixed overhead variance.
$
ACTUAL OVERHEAD FIXED | BUDGETED FIXED OVER HEAD | FIXED OVERHEAD COST APPLIED | ||
(AFOH) | (BFOH) | (SH*SR) | ||
3,05,000.00 | 3,00,000.00 | 3,20,000.00 | ||
(64000 Hours*5) | ||||
Fixed Over Head spending Variance | = | AFOH-BFOH | ||
= | 305000-300000 | |||
= | 5,000.00 | UNFAVORABLE | ||
Fixed Overhead production Volume | ||||
Variance | = | BFOH-(SH*SR) | ||
= | 300000-320000 | |||
= | -20,000.00 | FAVORABLE | ||
Total Fixed Overhead Variance | = | AFOH-(SH*SR) | ||
= | 305000-320000 | |||
= | -15,000.00 | FAVORABLE |