Blumen Textiles Corporation began April with a budget for 36,000 hours of production in the Weaving Department. The department has a full capacity of 48,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the beginning of April was as follows: Variable overhead $126,000 Fixed overhead 86,400 Total $212,400 The actual factory overhead was $214,900 for April. The actual fixed factory overhead was as budgeted. During April, the Weaving Department had standard hours at actual production volume of 37,000 hours. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required. a. Determine the variable factory overhead controllable variance.$ b. Determine the fixed factory overhead volume variance.$
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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Blumen Textiles Corporation began April with a budget for 36,000 hours of production in the Weaving Department. The department has a full capacity of 48,000 hours under normal business conditions. The budgeted
overhead at the planned volumes at the beginning of April was as follows:Variable overhead $126,000 Fixed overhead 86,400 Total $212,400 The actual factory overhead was $214,900 for April. The actual fixed factory overhead was as budgeted. During April, the Weaving Department had standard hours at actual production volume of 37,000 hours. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required.
a. Determine the variable factory overhead controllable variance.
$b. Determine the fixed factory overhead volume variance.
$
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