The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% of normal capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: Actual: Variable factory overhead Fixed factory overhead Standard hours allowed for units produced: The variable factory overhead controllable variance is a. $12,000 unfavorable b. $14,000 unfavorable c. $12,000 favorable Od. $26,000 unfavorable $360,000 104,000 60,000 hours
The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% of normal capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows: Actual: Variable factory overhead Fixed factory overhead Standard hours allowed for units produced: The variable factory overhead controllable variance is a. $12,000 unfavorable b. $14,000 unfavorable c. $12,000 favorable Od. $26,000 unfavorable $360,000 104,000 60,000 hours
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 15E: Factory overhead cost variances The following data relate to factory overhead cost for the...
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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 standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% of normal
capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows:
Actual: Variable factory overhead
Fixed factory overhead
Standard hours allowed for units produced:
The variable factory overhead controllable variance is
a. $12,000 unfavorable
b. $14,000 unfavorable
c. $12,000 favorable
d. $26,000 unfavorable
$360,000
104,000
60,000 hours](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc40b20a9-57c0-4331-bf66-348582f40752%2Fb3b9ff30-9ccc-432e-bc8f-d46336f5293d%2F4rtwvkh_processed.png&w=3840&q=75)
Transcribed Image Text:The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% of normal
capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows:
Actual: Variable factory overhead
Fixed factory overhead
Standard hours allowed for units produced:
The variable factory overhead controllable variance is
a. $12,000 unfavorable
b. $14,000 unfavorable
c. $12,000 favorable
d. $26,000 unfavorable
$360,000
104,000
60,000 hours
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