1.

Flexible Overhead Budget

Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 15,000 hours of productive capacity in the department:

Variable overhead cost:
Indirect factory labor	$112,500
Power and light	5,550
Indirect materials	45,000
Total variable overhead cost		$163,050
Fixed overhead cost:
Supervisory salaries	$57,070
Depreciation of plant and equipment	35,870
Insurance and property taxes	22,830
Total fixed overhead cost		115,770
Total factory overhead cost		$278,820

Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 13,000, 15,000, and 17,000 hours of production. Round your interim computations to the nearest cent, if required. Enter all amounts as positive numbers.

Leno Manufacturing Company
Factory Overhead Cost Budget-Press Department
For the Month Ended November 30
Direct labor hours	13,000	15,000	17,000
Variable overhead cost:
Indirect factory labor	$___	$___	$___
Power and light	___	___	___
Indirect materials	___	___	___
Total variable factory overhead	$___	$___	$___
Fixed factory overhead cost:	___	___	___
Supervisory salaries	$___	$___	$___
Depreciation of plant and equipment	___	___	___
Insurance and property taxes	___	___	___
Total fixed factory overhead	$___	$___	$___
Total factory overhead cost	$___	$___	$___

2.

Factory Overhead Cost Variances

The following data relate to factory overhead cost for the production of 4,000 computers:

Actual:	Variable factory overhead	$87,300
	Fixed factory overhead	27,000
Standard:	4,000 hrs. at $27	108,000

If productive capacity of 100% was 6,000 hours and the total factory overhead cost budgeted at the level of 4,000 standard hours was $117,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $4.5 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

3.

Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis

Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 5,200 units of product were as follows:

	Standard Costs		Actual Costs
Direct materials	6,800 lb. at $5.00		6,700 lb. at $4.90
Direct labor	1,300 hrs. at $18.00		1,330 hrs. at $18.20
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 1,360 direct
	labor hrs.:
		Variable cost, $4.00	$5,150 variable cost
		Fixed cost, $6.30	$8,568 fixed cost

Each unit requires 0.25 hour of direct labor.

Variance Amount Favorable/Unfavorable Variable factory overhead controllable variance hice Fixed factory overhead volume variance Total factory overhead cost variance Required: a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct materials price variance Direct materials quantity variance Total direct materials cost variance $ b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct labor rate variance Direct labor time variance Total direct labor cost variance $ c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variable factory overhead controllable variance Fixed factory overhead volume variance Total factory overhead cost variance Variance Amount Favorable/Unfavorable Variable factory overhead controllable variance hice Fixed factory overhead volume variance Total factory overhead cost variance Required: a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct materials price variance Direct materials quantity variance Total direct materials cost variance $ b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct labor rate variance Direct labor time variance Total direct labor cost variance $ c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variable factory overhead controllable variance Fixed factory overhead volume variance Total factory overhead cost variance