The Matten Company has developed standard overhead costs based upon a capacity of 180,000 direct labor hours: Standard costs per unit: Variable portion 2 hours @ $3 = $ 6 Fixed portion 2 hours @ $5 = 10 $ 16 During April, 85,000 units were scheduled for production; however, only 80,000 units were actually produced. The following data relate to April: Actual direct labor cost incurred was $644,000 for 165,000 actual hours of work. Actual overhead incurred totaled $1,378,000; $518,000 variable and $860,000 fixed. All inventories are carried at standard cost. Required: (Be sure to indicate whether the variances are favorable or unfavorable.) a. Compute the fixed overhead spending (budget) variance. _a)________ b. Compute the production volume variance. b)_
The Matten Company has developed standard overhead costs based upon a capacity of 180,000 direct labor hours: Standard costs per unit: Variable portion 2 hours @ $3 = $ 6 Fixed portion 2 hours @ $5 = 10 $ 16 During April, 85,000 units were scheduled for production; however, only 80,000 units were actually produced. The following data relate to April: Actual direct labor cost incurred was $644,000 for 165,000 actual hours of work. Actual overhead incurred totaled $1,378,000; $518,000 variable and $860,000 fixed. All inventories are carried at standard cost. Required: (Be sure to indicate whether the variances are favorable or unfavorable.) a. Compute the fixed overhead spending (budget) variance. _a)________ b. Compute the production volume variance. b)_
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Matten Company has developed
standard overhead costs based upon a
capacity of 180,000 direct labor hours:
Standard costs per unit: Variable
portion 2 hours @ $3 = $6 Fixed
portion 2 hours @ $5 = 10 $ 16 During
April, 85,000 units were scheduled for
production; however, only 80,000
units were actually produced.
The following data relate to April:
Actual direct labor cost incurred was
$644,000 for 165,000 actual hours of
work.
Actual overhead incurred totaled
$1,378,000; $518,000 variable and
$860,000 fixed.
All inventories are carried at standard
cost. Required: (Be sure to indicate
whether the variances are favorable or
unfavorable.) a. Compute the fixed
overhead spending (budget) variance.
_a)__
b. Compute the
production volume
variance._b)__
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