Factory Overhead Variance Corrections The data related to Shunda Enterprises Inc.'s factory overhead cost for the production of 30,000 units of product are as follows: Actual: Variable factory overhead $186,700 Fixed factory overhead 133,300 Standard: 46,000 hrs. at $7 ($4.10 for variable factory overhead) 322,000 Productive capacity at 100% of normal was 45,000 hours, and the factory overhead cost budgeted at the level of 46,000 standard hours was $320,100. Based on these data, the chief cost accountant prepared the following variance analysis: Variable factory overhead controllable variance: Actual variable factory overhead cost incurred $186,700 Budgeted variable factory overhead for 46,000 hours (188,600) Variance-favorable $(1,900) Fixed factory overhead volume variance: Normal productive capacity at 100% 45,000 hrs. Standard for amount produced (46,000) Productive capacity not used 1,000 hrs. Standard variable factory overhead rate x $7 Variance-unfavorable 7,000 Total factory overhead cost variance-unfavorable $5,100 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 Favorable v Fixed Factory Overhead Volume Variance Favorable v Total Factory Overhead Cost Variance Favorable v
Factory Overhead Variance Corrections The data related to Shunda Enterprises Inc.'s factory overhead cost for the production of 30,000 units of product are as follows: Actual: Variable factory overhead $186,700 Fixed factory overhead 133,300 Standard: 46,000 hrs. at $7 ($4.10 for variable factory overhead) 322,000 Productive capacity at 100% of normal was 45,000 hours, and the factory overhead cost budgeted at the level of 46,000 standard hours was $320,100. Based on these data, the chief cost accountant prepared the following variance analysis: Variable factory overhead controllable variance: Actual variable factory overhead cost incurred $186,700 Budgeted variable factory overhead for 46,000 hours (188,600) Variance-favorable $(1,900) Fixed factory overhead volume variance: Normal productive capacity at 100% 45,000 hrs. Standard for amount produced (46,000) Productive capacity not used 1,000 hrs. Standard variable factory overhead rate x $7 Variance-unfavorable 7,000 Total factory overhead cost variance-unfavorable $5,100 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 Favorable v Fixed Factory Overhead Volume Variance Favorable v Total Factory Overhead Cost Variance Favorable v
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Performance Eval Variances: Refer to the picture. Thank you!
Transcribed Image Text:Factory Overhead Variance Corrections
The data related to Shunda Enterprises Inc.'s factory overhead cost for the production of 30,000 units of product are as follows:
Actual:
Variable factory overhead
$186,700
Fixed factory overhead
133,300
Standard:
46,000 hrs. at $7 ($4.10 for variable factory overhead)
322,000
Productive capacity at 100% of normal was 45,000 hours, and the factory overhead cost budgeted at the level of 46,000 standard hours was $320,100. Based on these data, the chief cost accountant prepared
the following variance analysis:
Variable factory overhead controllable variance:
Actual variable factory overhead cost incurred
$186,700
Budgeted variable factory overhead for 46,000 hours
(188,600)
Variance-favorable
$(1,900)
Fixed factory overhead volume variance:
Normal productive capacity at 100%
45,000 hrs.
Standard for amount produced
(46,000)
Productive capacity not used
1,000 hrs.
Standard variable factory overhead rate
x $7
Variance-unfavorable
7,000
Total factory overhead cost variance-unfavorable
$5,100
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
$4
Favorable
Fixed Factory Overhead Volume Variance
Favorable
Total Factory Overhead Cost Variance
Favorable
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