Question

In: Accounting

Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches Branch Company provided the following information:...

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.

$  

Solutions

Expert Solution

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

Related Solutions

Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches Branch Company provided the following information:...
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...
Fixed Overhead Spending and Volume Variances, Capacity Management Lorale Company, a producer of recreational vehicles, recently...
Fixed Overhead Spending and Volume Variances, Capacity Management Lorale Company, a producer of recreational vehicles, recently decided to begin producing a major subassembly for jet skis. The subassembly would be used by Lorale’s jet ski plants and also would be sold to other producers. The decision was made to lease two large buildings in two different locations: Little Rock, Arkansas, and Athens, Georgia. The company agreed to an 11-year, renewable lease contract. The plants were of the same size, and...
What is the volume variance in fixed overhead? Is the volume variance in fixed overhead favorable...
What is the volume variance in fixed overhead? Is the volume variance in fixed overhead favorable or unfavorable? Use the following scenario to help with the questions: DeFleur manufactures bicycles. The bicycles are manufactured in two divisions. In the framing division, the carbon bicycle frames are manufactured. In the assembly division, the components are assembled to the frame and the bike is ready for sale. There is no market for the unassembled frames and all manufactured frames are transferred to...
Overhead Application, Fixed and Variable Overhead Variances Zepol Company is planning to produce 600,000 power drills...
Overhead Application, Fixed and Variable Overhead Variances Zepol Company is planning to produce 600,000 power drills for the coming year. The company uses direct labor hours to assign overhead to products. Each drill requires 0.75 standard hour of labor for completion. The total budgeted overhead was $1,777,500. The total fixed overhead budgeted for the coming year is $832,500. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. Actual results for the year are: Actual production (units)...
OVERHEAD APPLICATION, FIXED AND VARIABLE OVERHEAD VARIANCES Tules Company is planning to produce 2,400,000 power drills...
OVERHEAD APPLICATION, FIXED AND VARIABLE OVERHEAD VARIANCES Tules Company is planning to produce 2,400,000 power drills for the coming year. The company uses direct labour hours to assign overhead to products. Each drill requires 0.5 standard hour of labour for completion. The total budgeted overhead was $2,700,000. The total fixed overhead budgeted for the coming year is $1,320,000. Predetermined overhead rates are calculated using expected production, measured in direct labour hours. Actual results for the year are: Actual production (units)   ...
OVERHEAD APPLICATION, FIXED AND VARIABLE OVERHEAD VARIANCES Tules Company is planning to produce 2,400,000 power drills...
OVERHEAD APPLICATION, FIXED AND VARIABLE OVERHEAD VARIANCES Tules Company is planning to produce 2,400,000 power drills for the coming year. The company uses direct labour hours to assign overhead to products. Each drill requires 0.5 standard hour of labour for completion. The total budgeted overhead was $2,700,000. The total fixed overhead budgeted for the coming year is $1,320,000. Predetermined overhead rates are calculated using expected production, measured in direct labour hours. Actual results for the year are: Actual production (units)      2,360,000...
Overhead volume variances do not signal that overhead costs are in or out of control. Do...
Overhead volume variances do not signal that overhead costs are in or out of control. Do you agree? Please no hand-written answers.
Use the following information of Alfred Industries. Standard manufacturing overhead based on normal monthly volume: Fixed...
Use the following information of Alfred Industries. Standard manufacturing overhead based on normal monthly volume: Fixed ($300,300 ÷ 20,000 units) $ 15.02 Variable ($100,000 ÷ 20,000 units) 5.00 $ 20.02 Units actually produced in current month 18,000 units Actual overhead costs incurred (including $300,000 fixed) $ 383,800 Compute the overhead spending variance and the volume variance. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).) Overhard spending...
Use the following information of Alfred Industries. Standard manufacturing overhead based on normal monthly volume: Fixed...
Use the following information of Alfred Industries. Standard manufacturing overhead based on normal monthly volume: Fixed ($303,400 ÷ 20,000 units) $ 15.17 Variable ($100,000 ÷ 20,000 units) 5.00 $ 20.17 Units actually produced in current month 18,000 units Actual overhead costs incurred (including $300,000 fixed) $ 383,800 Compute the overhead spending variance and the volume variance. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)
Use the following information of Alfred Industries. Standard manufacturing overhead based on normal monthly volume: Fixed...
Use the following information of Alfred Industries. Standard manufacturing overhead based on normal monthly volume: Fixed ($304,500 ÷ 20,000 units) $ 15.23 Variable ($100,000 ÷ 20,000 units) 5.00 $ 20.23 Units actually produced in current month 18,000 units Actual overhead costs incurred (including $300,000 fixed) $ 383,800 Compute the overhead spending variance and the volume variance. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).) Loading... Use...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT