Factory overhead cost and production data for a firm for a year were as follows: Actual Variable
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Question:
Factory overhead cost and production data for a firm for a year were as follows:
Actual
Variable cost- $90,000
Fixed cost- $205,000
Machine Hours- 20,000
Budget
Variable cost-$95,000
Fixed cost- $190,000
Machine Hours- 19,000
Factory overhead is recovered from production using machine hours as the cost driver.
Task 4
a.Calculate the factory overhead recovery rate.
b.Determine the amount of over or under-applied overhead. Your answer must clearly state whether the calculated amount is over or under-applied.
c.Analyse over/under applied overhead into a spending variance and a capacity variance.
Related Book For
Principles of Cost Accounting
ISBN: 978-1305087408
17th edition
Authors: Edward J. Vanderbeck, Maria Mitchell
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