data related to Shunda Enterprises Inc.'s factory overhead cost for the production of 40,000 units of product are as follows: ual: Variable factory overhead $138,900 Fixed factory overhead 101,000 ndard: 61,000 hrs. at $4.00 ($2.30 for variable factory overhead) 244,000 đuctive capacity at 100% of normal was 59,900 hours, and the factory overhead cost budgeted at the level of 61,000 standard hours was $242,500. Based on these data, the chief cost accountant prepared the following variance analysis: iable factory overhead controllable variance: actual variable factory overhead cost incurred $138,900 Budgeted variable factory overhead for 61,000 hours 140,300 Variance-favorable $(1,400) ed factory overhead volume variance: Normal productive capacity at 100% 59,900 hrs. Standard for amount produced 61,000 Productive capacity not used 1,100 hrs. Standard variable factory overhead rate x $4.00 Variance-unfavorable 4,400 al factory overhead cost variance-unfavorable $3,000 mpute the following to assist you in identifying the errors in the factory overhead cost variance analysis. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your inter putations to the nearest cent, if required. riance Favorable/Unfavorable Amount iable Factory Overhead Controllable Variance -1,400 Favorable ed Factory Overhead Volume Variance Favorable al Factory Overhead Cost Variance 3,000 Favorable

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Factory Overhead Variance Corrections
The data related to Shunda Enterprises Inc.'s factory overhead cost for the production of 40,000 units of product are as follows:
Actual:
Variable factory overhead
$138,900
Fixed factory overhead
101,000
Standard:
61,000 hrs. at $4.00 ($2.30 for variable factory overhead)
244,000
Productive capacity at 100% of normal was 59,900 hours, and the factory overhead cost budgeted at the level of 61,000 standard hours was $242,500. Based on these data, the chief cost accountant prepared the following variance analysis:
Variable factory overhead controllable variance:
Actual variable factory overhead cost incurred
$138,900
Budgeted variable factory overhead for 61,000 hours
140,300
Variance-favorable
$(1,400)
Fixed factory overhead volume variance:
Normal productive capacity at 100%
59,900 hrs.
Standard for amount produced
61,000
Productive capacity not used
1,100 hrs.
Standard variable factory overhead rate
x $4.00
Variance-unfavorable
4,400
Total factory overhead cost variance-unfavorable
$3,000
Compute the following to assist you in identifying the errors in the factory overhead cost variance analysis. 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.
Variance
Amount
Favorable/Unfavorable
Variable Factory Overhead Controllable Variance
-1,400
Favorable
Fixed Factory Overhead Volume Variance
Favorable
Total Factory Overhead Cost Variance
3,000
Favorable
Transcribed Image Text:Factory Overhead Variance Corrections The data related to Shunda Enterprises Inc.'s factory overhead cost for the production of 40,000 units of product are as follows: Actual: Variable factory overhead $138,900 Fixed factory overhead 101,000 Standard: 61,000 hrs. at $4.00 ($2.30 for variable factory overhead) 244,000 Productive capacity at 100% of normal was 59,900 hours, and the factory overhead cost budgeted at the level of 61,000 standard hours was $242,500. Based on these data, the chief cost accountant prepared the following variance analysis: Variable factory overhead controllable variance: Actual variable factory overhead cost incurred $138,900 Budgeted variable factory overhead for 61,000 hours 140,300 Variance-favorable $(1,400) Fixed factory overhead volume variance: Normal productive capacity at 100% 59,900 hrs. Standard for amount produced 61,000 Productive capacity not used 1,100 hrs. Standard variable factory overhead rate x $4.00 Variance-unfavorable 4,400 Total factory overhead cost variance-unfavorable $3,000 Compute the following to assist you in identifying the errors in the factory overhead cost variance analysis. 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. Variance Amount Favorable/Unfavorable Variable Factory Overhead Controllable Variance -1,400 Favorable Fixed Factory Overhead Volume Variance Favorable Total Factory Overhead Cost Variance 3,000 Favorable
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