Standish Company manufactures consumer products and provided the following information for the month of February: Units produced 131,200 Standard direct labor hours per unit 0.2 Standard fixed overhead rate (per direct labor hour) $2.20 Budgeted fixed overhead $64,000 Actual fixed overhead costs $68,800 Actual hours worked 26,500 Required: 1. Calculate the fixed overhead spending variance using the formula approach. (Favorable/Unfavorable) 2. Calculate the volume variance using the formula approach. (Favorable/Unfavorable) 3. What if 127,500 units had actually been produced in February? What impact would that have had? Indicate what the new variances would be below. Fixed Overhead Spending Variance $ Favorable/Unfavorable Volume Variance $ Favorable/Unfavorable
Standish Company manufactures consumer products and provided the following information for the month of February: Units produced 131,200 Standard direct labor hours per unit 0.2 Standard fixed overhead rate (per direct labor hour) $2.20 Budgeted fixed overhead $64,000 Actual fixed overhead costs $68,800 Actual hours worked 26,500 Required: 1. Calculate the fixed overhead spending variance using the formula approach. (Favorable/Unfavorable) 2. Calculate the volume variance using the formula approach. (Favorable/Unfavorable) 3. What if 127,500 units had actually been produced in February? What impact would that have had? Indicate what the new variances would be below. Fixed Overhead Spending Variance $ Favorable/Unfavorable Volume Variance $ Favorable/Unfavorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Standish Company manufactures consumer products and provided the following information for the month of February:
| Units produced | 131,200 |
| Standard direct labor hours per unit | 0.2 |
| Standard fixed |
$2.20 |
| Budgeted fixed overhead | $64,000 |
| Actual fixed overhead costs | $68,800 |
| Actual hours worked | 26,500 |
Required:
1. Calculate the fixed overhead spending variance using the formula approach.
(Favorable/Unfavorable)
2. Calculate the volume variance using the formula approach.
(Favorable/Unfavorable)
3. What if 127,500 units had actually been produced in February? What impact would that have had? Indicate what the new variances would be below.
| Fixed Overhead Spending Variance | $ |
Favorable/Unfavorable
|
| Volume Variance | $ |
Favorable/Unfavorable
|
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