All estimated costs are based on labor hours. How much is the factory overhead variance? Fo The following information is available for the year 2030:Factory Overhead Control accountActual labor hoursEstimated labor hoursEstimated CostsVariable50.1,551,500296,000320,000720,000Fixed:Factory rentDepreciation - office equipmentAdvertisingOffice Rent860,00048,00010,000368,000140,00012,00010,000i 2,000Depreciation - factory equipmentSalary - office secretarySalary - factory guardFactory InsuranceAll estimated costs are based on labor hours. How much is the factoryoverhead variance?a. 50,600 overb. 455,750 overc. 435,400 overd. 73,888 under

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Description: All estimated costs are based on labor hours. How much is the factory overhead variance? Fo The following information is available for the year 2030:Factory Overhead Control accountActual labor hoursEstimated labor hoursEstimated CostsVariable50.1,55

Total Estimated Costs: Variable - 7,20,000…

Answered: Factory Actual labor hours Estimated…

Business

Accounting

Factory Actual labor hours Estimated labor hours Estimated Costs

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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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All estimated costs are based on labor hours. How much is the factory overhead variance?

Fo The following information is available for the year 2030:
Factory Overhead Control account
Actual labor hours
Estimated labor hours
Estimated Costs
Variable
50.
1,551,500
296,000
320,000
720,000
Fixed:
Factory rent
Depreciation - office equipment
Advertising
Office Rent
860,000
48,000
10,000
368,000
140,000
12,000
10,000
i 2,000
Depreciation - factory equipment
Salary - office secretary
Salary - factory guard
Factory Insurance
All estimated costs are based on labor hours. How much is the factory
overhead variance?
a. 50,600 over
b. 455,750 over
c. 435,400 over
d. 73,888 under

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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