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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

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

FINANCIAL ACCOUNTING
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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Performance Eval - Variances:

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 -1,900 Favorable v Fixed Factory Overhead Volume Variance -2,900 Favorable v Total Factory Overhead Cost Variance -2,000 X Favorable
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 -1,900 Favorable v Fixed Factory Overhead Volume Variance -2,900 Favorable v Total Factory Overhead Cost Variance -2,000 X Favorable
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