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Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of 7,000 computers: Actual: Variable factory overhead Fixed factory overhead 7,000 hrs. at $30 Standard: If productive capacity of 100% was 11,000 hours and the factory overhead cost budgeted at the level of 7,000 standard hours was $227,000, determine the variable factory overhead Controllable Variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $4.25 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variance Amount Favorable/Unfavorable Controllable variance Volume variance Total factory overhead cost variance: $174,800 46,750 210,000 Feedback $ Favorable ✓ Unfavorable Unfavorable ✓ ✓ ✓ Check My Work The variable factory overhead controllable variance is the difference between the actual variable overhead costs and the budgeted variable overhead for actual production. The fixed factory overhead volume variance is the difference between the budgeted fixed overhead at 100% of normal capacity and the standard fixed overhead for the actual units produced. Learning Objective 4

Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of 7,000 computers: Actual: Variable factory overhead Fixed factory overhead 7,000 hrs. at $30 Standard: If productive capacity of 100% was 11,000 hours and the factory overhead cost budgeted at the level of 7,000 standard hours was $227,000, determine the variable factory overhead Controllable Variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $4.25 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variance Amount Favorable/Unfavorable Controllable variance Volume variance Total factory overhead cost variance: $174,800 46,750 210,000 Feedback $ Favorable ✓ Unfavorable Unfavorable ✓ ✓ ✓ Check My Work The variable factory overhead controllable variance is the difference between the actual variable overhead costs and the budgeted variable overhead for actual production. The fixed factory overhead volume variance is the difference between the budgeted fixed overhead at 100% of normal capacity and the standard fixed overhead for the actual units produced. Learning Objective 4

Managerial Accounting
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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Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of 7,000 computers: Actual: Variable factory overhead Fixed factory overhead 7,000 hrs. at $30 $174,800 46,750 210,000 If productive capacity of 100% was 11,000 hours and the factory overhead cost budgeted at the level of 7,000 standard hours was $227,000, determine the variable factory overhead Controllable Variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $4.25 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variance Amount Favorable/Unfavorable Controllable variance Standard: Volume variance Total factory overhead cost variance: Feedback $ $ $ Favorable Unfavorable Unfavorable ✓ Check My Work The variable factory overhead controllable variance is the difference between the actual variable overhead costs and the budgeted variable overhead for actual production. The fixed factory overhead volume variance is the difference between the budgeted fixed overhead at 100% of normal capacity and the standard fixed overhead for the actual units produced. Learning Objective 4
Transcribed Image Text:Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of 7,000 computers: Actual: Variable factory overhead Fixed factory overhead 7,000 hrs. at $30 $174,800 46,750 210,000 If productive capacity of 100% was 11,000 hours and the factory overhead cost budgeted at the level of 7,000 standard hours was $227,000, determine the variable factory overhead Controllable Variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $4.25 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variance Amount Favorable/Unfavorable Controllable variance Standard: Volume variance Total factory overhead cost variance: Feedback $ $ $ Favorable Unfavorable Unfavorable ✓ Check My Work The variable factory overhead controllable variance is the difference between the actual variable overhead costs and the budgeted variable overhead for actual production. The fixed factory overhead volume variance is the difference between the budgeted fixed overhead at 100% of normal capacity and the standard fixed overhead for the actual units produced. Learning Objective 4
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