The following information relates to manufacturing overhead for Chapman Company: Standards: Total fixed factory overhead $450,000 Estimated production 25,000 units (100% of normal capacity) Overhead rates are based on machine hours. Standard hours allowed per unit produced 2 Fixed overhead rate $9.00 per machine hour Variable overhead rate $3.50 per hour Actual: Fixed factory overhead $450,000 Production 24,000 units Variable overhead $170,000 Compute the following: Enter favorable variances as negative numbers. a. Fixed factory overhead volume variance $fill in the blank 1 b. Variable factory overhead controllable variance $fill in the blank 3 c. Total factory overhead cost variance $fill in the blank 5
The following information relates to manufacturing overhead for Chapman Company: Standards: Total fixed factory overhead $450,000 Estimated production 25,000 units (100% of normal capacity) Overhead rates are based on machine hours. Standard hours allowed per unit produced 2 Fixed overhead rate $9.00 per machine hour Variable overhead rate $3.50 per hour Actual: Fixed factory overhead $450,000 Production 24,000 units Variable overhead $170,000 Compute the following: Enter favorable variances as negative numbers. a. Fixed factory overhead volume variance $fill in the blank 1 b. Variable factory overhead controllable variance $fill in the blank 3 c. Total factory overhead cost variance $fill in the blank 5
Chapter1: Financial Statements And Business Decisions
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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.
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The following information relates to manufacturing
| Standards: |
| Total fixed factory overhead $450,000 |
| Estimated production 25,000 units (100% of normal capacity) |
| Overhead rates are based on machine hours. |
| Standard hours allowed per unit produced 2 |
| Fixed overhead rate $9.00 per machine hour |
| Variable overhead rate $3.50 per hour |
| Actual: |
| Fixed factory overhead $450,000 |
| Production 24,000 units |
| Variable overhead $170,000 |
Compute the following: Enter favorable variances as negative numbers.
| a. Fixed factory overhead volume variance | $fill in the blank 1 | |
| b. Variable factory overhead controllable variance | $fill in the blank 3 | |
| c. Total |
$fill in the blank 5 |
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