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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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