Question

In: Accounting

How do you calcuate the Fixed Overhead (FOH) spending variance and the Fixed Overhead (FOH) production...

How do you calcuate the Fixed Overhead (FOH) spending variance and the Fixed Overhead (FOH) production volume variance given the following information:

(budgeted assembly time is 2 hrs per unit of output)

Actual Results Static Budget
Number of fans assembled $ sold 220 fans 150 fans
Hours of assembley time 396 hours         -
Variable Overhead (VOH) cost per hr of assembly time           - $ 31.00
VOH costs $ 12,693           -
FOH cost $ 15,510 $ 14,100

Solutions

Expert Solution

  • All working forms part of the answer
  • Working

Hrs

Rate

Amount

Budgeted Fixed Overhead

300 [150 fans x 2 hours per unit]

$              47.00

$           14,100.00

Standard Fixed Overhead or Fixed Overhead absorbed

440 [ 220 fans x 2 hours per unit]

$              47.00

$           20,680.00

Actual Fixed Overhead incurred

396

39.16666667

$           15,510.00

  • Answers

Fixed Overhead (FOH) Spending Variance

(

Standard Fixed Overhead or Fixed Overhead absorbed

-

Actual Fixed Overhead incurred

)

(

$             20,680.00

-

$            15,510.00

)

5170

Variance

$              5,170.00

Favourable-F

Fixed Overhead (FOH) Production Volume Variance

(

Standard Fixed Overhead or Fixed Overhead absorbed

-

Budgeted Fixed Overhead

)

(

$             20,680.00

-

$            14,100.00

)

6580

Variance

6580

Favourable-F


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