In: Accounting
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 |
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 |
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 |