What is the amount of the Factory OH Controllable Variance, given the following info: Actual production = 15,000 units Actual Costs = $360,000.00 for variable FOH + $104,000.00 for fixed FOH Budgeted Costs = $450,000 (standard hours for 15,000 units produced of 60,000 hours * standard FOH rate of $7.50) The standard OH rate = $7.50 per machine hour ($6.20 for variable FOH and $1.30 for fixed FOH) based on 100% capacity of 80,000 machine hours Group of answer choices $14,000.00 unfavorable $12,000.00 unfavorable $12,000.00 favorable $26,000.00 unfavorable
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.
What is the amount of the Factory OH Controllable Variance, given the following info:
Actual production = 15,000 units
Actual Costs = $360,000.00 for variable FOH + $104,000.00 for fixed FOH
Budgeted Costs = $450,000 (standard hours for 15,000 units produced of 60,000 hours * standard FOH rate of $7.50)
The standard OH rate = $7.50 per machine hour ($6.20 for variable FOH and $1.30 for fixed FOH) based on 100% capacity of 80,000 machine hours
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