Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of 3,000 computers: Variable factory overhead $122,200 Fixed factory overhead 3,000 hrs. at $49 Actual: Standard: 147,000 If productive capacity of 100% was 5,000 hours and the total factory overhead cost budgeted at the level of 3,000 standard hours was $161,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $7 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variance Controllable variance 35,000 Volume variance Total factory overhead cost variance Amount $ $ 14000 $ Favorable/Unfavorable Favorable Unfavorable Unfavorable
Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of 3,000 computers: Variable factory overhead $122,200 Fixed factory overhead 3,000 hrs. at $49 Actual: Standard: 147,000 If productive capacity of 100% was 5,000 hours and the total factory overhead cost budgeted at the level of 3,000 standard hours was $161,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $7 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variance Controllable variance 35,000 Volume variance Total factory overhead cost variance Amount $ $ 14000 $ Favorable/Unfavorable Favorable Unfavorable Unfavorable
Chapter1: Financial Statements And Business Decisions
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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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Transcribed Image Text:Factory Overhead Cost Variances
The following data relate to factory overhead cost for the production of 3,000 computers:
Variable factory overhead
$122,200
Actual:
Standard:
Fixed factory overhead
3,000 hrs. at $49
Variance
If productive capacity of 100% was 5,000 hours and the total factory overhead cost budgeted at the level of 3,000 standard hours was
$161,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory
overhead cost variance. The fixed factory overhead rate was $7 per hour. Enter a favorable variance as a negative number using a
minus sign and an unfavorable variance as a positive number.
Controllable variance
35,000
Volume variance
Total factory overhead cost variance
147,000
Amount
$
$ 14000
$
Favorable/Unfavorable
Favorable
Unfavorable
Unfavorable
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