The following data relate to factory overhead cost for the production of 5,000 computers: Actual: Variable factory overhead $157,600 Fixed factory overhead 52,000 Standard: 5,000 hrs. at $39 195,000 If productive capacity of 100% was 8,000 hours and the total factory overhead cost budgeted at the level of 5,000 standard hours was $214,500, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $6.5 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

The following data relate to factory overhead cost for the production of 5,000 computers: Actual: Variable factory overhead $157,600 Fixed factory overhead 52,000 Standard: 5,000 hrs. at $39 195,000 If productive capacity of 100% was 8,000 hours and the total factory overhead cost budgeted at the level of 5,000 standard hours was $214,500, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $6.5 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Describe three reasons for an unfavorable direct manufacturing labor efficiency variance.

A: Direct Labor Efficiency Variance: Direct labor efficiency variance is the variation in the actual…

Q: What distinction must be made when computing the materials price variance vs. the materials quantity…

A: The answer for the theory question on material price and quantity variances is discussed hereunder :…

Q: Why is the direct materials usage variance allocated only to WIP Inventory, Finished Goods…

A: Solution:- Introduction:- The following formula used to calculation as follows:- materials usage…

Q: Siemens AG invests €80,000,000 to build a manufacturing plant to build wind turbines. The company…

A: The term "payback period " refers to the amount of years needed to recoup the initial monetary…

Q: Why is the flexible-budget variance the same amount as the spending variance for fixed manufacturing…

A: Spending variance:It indicates the amount of actual cost incurred for actual production over the…

Q: Crritically identify the possible causes of the labour and material variances

A: Labor variances in a business refer to the differences between the expected or budgeted labor costs…

Q: Under the 3 variance method for analyzing overhead, the difference between the actual factory…

A: Under the 3 variance method for analyzing overhead, the difference between the actual factory…

Q: Levine Inc., which produces a single product, has prepared the following standard cost sheet for one…

A: Total material variance :— It is the difference between standard direct material cost for actual…

Q: PROBLEM III At the beginning of the school year. Sheldon Allman decided to prepare a cash budget for…

A: Cash budget is one of the useful budget being prepared in business. It shows all expected cash…

Q: The materials price variance should be computed when materials are purchased. Group of answer…

A: Variance: The difference between the actual cost or price and the budgeted (standard) cost or price…

Q: The controllable variance measures a. operating results at more than normal capacity b. operating…

A: Standard costs are estimates of the actual costs in a company’s production processThen, the actual…

Q: How are overhead variances useful in nonmanufacturing settings? Can you think of an example?

A: All overhead variances, even those incurred outside the manufacturing function, are undoubtedly…

Q: Labour efficiency variance Fixed overhead price variance Fixed overhead efficiency variance

A: Labour efficiency varianceLabour Efficiency Variance is the difference between the standard labour…

Q: Change in direct materials cost per equivalent unit

A: The cost per equivalent unit for the material is based on the equivalent units for material and the…

Q: Variance Variable Factory Overhead Controllable Variance Fixed Factory Overhead Volume Variance…

A: Total Factory Overhead Cost Variance is a comparative tool for actual costs versus standard costs…

Q: TRUE OR FALSE Production volume variance appears whenever actual production deviates from the…

A: Volume variance = ( actual production - budgeted production) x Standard fixed factory overhead rate…

Q: Most companies compute the materials price variance when materials are purchased. Group of choices…

A: SOlution: True. This is because Most companies compute the materials price variance when materials…

Q: The variable overhead spending variance has to do with the efficient use of The overhead items. All…

A: Variance: The difference between the actual cost or price and the budgeted (standard) cost or price…

Q: What makes a variance favorable? Give an example of a favorable variance involving materials. What…

A: Variance is the difference in the value of budgeted cost\quantity and the actual cost\quantity. When…

Q: How are spoiled units accounted for in Process Costing?

A: Spoiled Units refers to the units which does not meet the required standards for quality and utility…

Q: b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost…

A: Actual Quantity (AQ)= 5,600 units Standard Quantity(SQ) = 5,700 units Actual Price(AP) = $ 5.50…

Q: Why Fixed Overhead Volume Variance is said to be a favorable variance when the actual output is more…

A: Fixed overhead volume variance is the difference between Applied fixed overhead and Budgeted Fixed…

Q: What is the variation in the use of materials at actual price and standard materials at standard…

A: "since you have posted more than one questions and not specified which should be solved so we are…

Q: What effect, if any, would you expect poor-quality materials to hare on direct labor variances?

A: Direct labor variance arises due to the differences in the actual and budgeted rates of wage or…

Q: If a company uses predetermined rate for absorption of manufacturing overhead, the volume variance…

A: Introduction:- A predetermined overhead rate is an allocation rate , which is used to apply the…

Q: Evergreen Ceramics produces large planters to be used in urban landscaping projects. A special earth…

A: Variance arises when the actual costs is different from the standard costs. The results are…

Q: Draw a graph showing budgeted and applied fixed overhead, and show an unfavorable (or positive)…

Concept explainers

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.

Question

Factory Overhead Cost Variances

Definition Definition Total cost of procuring or producing a product or the cost that an individual or business owner undertakes for the manufacturing of goods.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which of the following statements Is true? Multiple Choice The material quantity variance is recorded when overhead is applied to production. The material price and the material quantity variances are recorded at the same time., The materials quantity variance is recorded when materials are used in production. The materials quantity variance is recorded when materials are purchased.
Please do not give solution in image format thanku
The following direct materials and direct labor data pertain to the operations of Sandhill Company for the month of August. Costs Actual labor rate Actual materials price Standard labor rate Standard materials price $13 $120 $12.50 $124 Quantities per hour per ton per hour per ton Actual hours incurred and used Actual quantity of materials purchased and used Standard hours used Standard quantity of materials used 4,900 hours 2,000 tons 4,960 hours 1,990 tons
a. Direct materials price variance Unfavorable b. Direct materials quantity variance Favorable c. Direct materials cost variance Unfavorable
The standard price for direct materials is used in the calculation of which variances ? Neither the price variance nor the quantity variance The quantity variance but not the price variance Both the price variance and the quantity variance The price variance but not the quantity variance
а. Standard Cost per Unit for Direct Materials and Direct Labor b. Direct Materials Price Variance Wrong Direct Materials Quantity Variance Wrong Total Direct Materials Cost Variance Wrong с. Direct Labor Rate Variance Wrong Direct Labor (Time) Efficiency Variance Wrong Total Direct Labor Cost Variance Wrong
Subject: acounting
Which of the following is the difference between the actual cost of materials and thematerials cost allowed for the actual level of activity? a. Total materials variance b. Total materials regression c. Total materials cost d. Total materials margin e. None of these
f
The following direct materials and direct labor data pertain to the operations of Sunland Company for the month of August. Costs Actual labor rate Actual materials price Standard labor rate Standard materials price $13 $290 $12.50 per hour per ton per hour $292 per ton Quantities. Actual hours incurred and used Actual quantity of materials purchased and used Standard hours used Standard quantity of materials used. 4,200 hours 1,000 tons 4,290 hours 990 tons
What effect, if any, would you expect purchasing poor-quality materials to have on direct labour variances?
the difference between the actual price and the standard price, multiplied by the actual quantity of materials purchased is the