Calculating the Fixed Overhead Spending and Volume Variances Standish Company manufactures consumer products and provided the following information for the month of February: Units produced 131,000 Standard direct labor hours per unit 0.20 Standard fixed overhead rate (per direct labor hour) $2.50 Budgeted fixed overhead $65,000 Actual fixed overhead costs $68,300 Actual hours worked 26,350 Required: 1. Calculate the fixed overhead spending variance using the formula approach. $ Favorable Unfavorable 2. Calculate the volume variance using the formula approach. $ Favorable Unfavorable 3. What if 129,600 units had actually been produced in February? What impact would that have had? Indicate what the new variances would be below. Fixed Overhead Spending Variance $ Favorable Unfavorable Volume Variance $ Favorable Unfavorable

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question
100%
Calculating the Fixed Overhead Spending and Volume Variances
Standish Company manufactures consumer products and provided the following information for the
month of February:
Units produced 131,000
Standard direct labor hours per unit 0.20
Standard fixed overhead rate (per direct labor hour) $2.50
Budgeted fixed overhead $65,000
Actual fixed overhead costs $68,300
Actual hours worked 26,350
Required:
1. Calculate the fixed overhead spending variance using the formula approach.
$
Favorable
Unfavorable
2. Calculate the volume variance using the formula approach.
$
Favorable
Unfavorable
3. What if 129,600 units had actually been produced in February? What impact would that have
had? Indicate what the new variances would be below.
Fixed Overhead Spending Variance $
Favorable
Unfavorable
Volume Variance $
Favorable
Unfavorable
Transcribed Image Text:Calculating the Fixed Overhead Spending and Volume Variances Standish Company manufactures consumer products and provided the following information for the month of February: Units produced 131,000 Standard direct labor hours per unit 0.20 Standard fixed overhead rate (per direct labor hour) $2.50 Budgeted fixed overhead $65,000 Actual fixed overhead costs $68,300 Actual hours worked 26,350 Required: 1. Calculate the fixed overhead spending variance using the formula approach. $ Favorable Unfavorable 2. Calculate the volume variance using the formula approach. $ Favorable Unfavorable 3. What if 129,600 units had actually been produced in February? What impact would that have had? Indicate what the new variances would be below. Fixed Overhead Spending Variance $ Favorable Unfavorable Volume Variance $ Favorable Unfavorable
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Performance measurements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education