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

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

ekkarill92 answered 6 months ago

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