Port Norris Textiles Corporation began September with a budget for 39,000 hours of production in the Weaving Department. The department has a full capacity of 52,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the beginning of September was as follows: Line Item Description Amount Variable overhead $136,500 Fixed overhead 93,600 Total $230,100 The actual factory overhead was $232,900 for September. The actual fixed factory overhead was as budgeted. During September, the Weaving Department had standard hours at actual production volume of 41,000 hours. Determine the variable factory overhead controllable variance and the fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required. a. Variable factory overhead controllable variance: fill in the blank 1 of 2$ fill in the blank 2 of 2 b. Fixed factory overhead volume variance: fill in the blank 1 of 2$ fill in the blank 2 of 2
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.
Port Norris Textiles Corporation began September with a budget for 39,000 hours of production in the Weaving Department. The department has a full capacity of 52,000 hours under normal business conditions. The budgeted
| Line Item Description | Amount |
|---|---|
| Variable overhead | $136,500 |
| Fixed overhead | 93,600 |
| Total | $230,100 |
The actual factory overhead was $232,900 for September. The actual fixed factory overhead was as budgeted. During September, the Weaving Department had standard hours at actual production volume of 41,000 hours.
Determine the variable factory overhead controllable variance and the fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required.
a. Variable factory overhead controllable variance: fill in the blank 1 of 2$ fill in the blank 2 of 2
b. Fixed factory overhead volume variance: fill in the blank 1 of 2$ fill in the blank 2 of 2
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