3. Factory Overhead Budget Sunny Side Company shows the following data regarding its factory overhead: ● ● Flexible Budget Formula: FOH = 20,000 + 1 X Standard: 1 unit of product requires 4 labor hours Normal Capacity: 2,500 units Budgeted Hours: A) Fixed Overhead (FFOH) B) Variable Overhead (VFOH) C) Total Budgeted Overhead D) REQUIRED: where: X number of labor hours hours Fixed Overhead Rate (FR) Variable Overhead Rate (VR) Standard Overhead Rate (SR) 1. Compute for the missing amounts. 2. What is the budgeted FOH if adjusted based on 7,500 actual hours (BAAH)? 3. What is the budgeted FOH if adjusted based on 8,000 standard hours (BASH)? E) F) G
3. Factory Overhead Budget Sunny Side Company shows the following data regarding its factory overhead: ● ● Flexible Budget Formula: FOH = 20,000 + 1 X Standard: 1 unit of product requires 4 labor hours Normal Capacity: 2,500 units Budgeted Hours: A) Fixed Overhead (FFOH) B) Variable Overhead (VFOH) C) Total Budgeted Overhead D) REQUIRED: where: X number of labor hours hours Fixed Overhead Rate (FR) Variable Overhead Rate (VR) Standard Overhead Rate (SR) 1. Compute for the missing amounts. 2. What is the budgeted FOH if adjusted based on 7,500 actual hours (BAAH)? 3. What is the budgeted FOH if adjusted based on 8,000 standard hours (BASH)? E) F) G
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:3. Factory Overhead Budget
Sunny Side Company shows the following data regarding its factory overhead:
Flexible Budget Formula: FOH = 20,000 + 1 X where: X - number of labor hours
Standard: 1 unit of product requires 4 labor hours
Normal Capacity: 2,500 units
Budgeted Hours: A)
Fixed Overhead (FFOH) B)
Variable Overhead (VFOH) C)
Total Budgeted Overhead D)
REQUIRED:
hours
Fixed Overhead Rate (FR) E)
Variable Overhead Rate (VR) F)
Standard Overhead Rate (SR) G)
1. Compute for the missing amounts.
What is the budgeted FOH if adjusted based on 7,500 actual hours (BAAH)?
2.
3. What is the budgeted FOH if adjusted based on 8,000 standard hours (BASH)?
4. 2-way Factory Overhead Variance Analysis
The normal capacity of Happy Lemon Company is 12,000 labor hours per month. At normal capacity, the
standard factory overhead rate is P 8 per labor hour based on P 72,000 of budgeted fixed cost per month
and a variable cost rate of P 2 per labor hour. During January, the company operated at 12,500 labor
hours, with actual factory overhead cost of P 75,000. The number of standard labor hours allowed for
the production actually attained is 10,000.
REQUIRED: 1. Overall FOH variance
2. FOH controllable variance
3. FOH volume variance
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