McDormand, Inc., reported a $3,000 unfavorable price variance for variable overhead and a $30,000 unfavorable price variance for fixed overhead. The flexible budget had $1,048,200 variable overhead based on 34,940 direct labor-hours; only 34,060 hours were worked. Total actual overhead was $1,802,400. The number of estimated hours for computing the fixed overhead application rate totaled 35,600 hours. Required: a. Prepare a variable overhead analysis. b. Prepare a fixed overhead analysis.

McDormand, Inc., reported a $3,000 unfavorable price variance for variable overhead and a $30,000 unfavorable price variance for fixed overhead. The flexible budget had $1,048,200 variable overhead based on 34,940 direct labor-hours; only 34,060 hours were worked. Total actual overhead was $1,802,400. The number of estimated hours for computing the fixed overhead application rate totaled 35,600 hours. Required: a. Prepare a variable overhead analysis. b. Prepare a fixed overhead analysis.

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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The following data relate to factory overhead cost for the production of 4,000 computers: Actual: Variable factory overhead $139,700 Fixed factory overhead 36,000 Standard: 4,000 hrs. at $42 168,000 If productive capacity of 100% was 6,000 hours and the total factory overhead cost budgeted at the level of 4,000 standard hours was $180,000, determine the variable factory overhead Controllable Variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $6 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variance Amount Favorable/Unfavorable Controllable variance $ Volume variance $ Total factory overhead cost variance $
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