1 of 2 a. $11.750 F w EX 23-17 Factory overhead cost variances Casual Comfort Textiles Corporation began January with a budget for 30,000 hours of production in the Weaving Department. The department has a full capacity of 10,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the beginning of January was as follows: Variable overhead $124500 Foxed overhead 1300 Total $16.500 The actual factory overhead was $178.900 for January. The actual fixed factory over head was as budgeted. During January, the Weaving Department had standard hours at actual production volume of 31.000 hours a. Determine the variable factory overhead controllable variance b. Determine the fixed factory overhead volume variance EX 23-18 Factory overhead variance corrections The data related to Elite Sporting Goods Company's factory overhead cost for the produc tion of 50,000 units of product are as follows: Actual Variable factory overhead 5216200 Foxed factory overhead 157.500 Standard 76,000 hrs. at 55.00 52.90 for variable factory overhead 0 000 Productive capacity at 100% of normal was 75.000 hours, and the factory overhead cost budgeted at the level of 76,000 standard hours was $377 900. Based on these data the chief cost accountant prepared the following variance analysis -51.500 Variable factory overhead controllable variance Actual variable factory overhead cost incurred S218.900 Budgeted variable factory overhead for 76.000 hours 220 400 Variance-favorable Fixed factory overhead volume variance Normal productive capacity at 100% 75.000 hes Standard for amount produced 75.000 Productive capacity not used 1000hrs Standard variable factory overhead rate Variance unfavorable Total factory overhead cost variance- favorable Identify the errors in the factory overhead cost variance analysis OBJ. 4 Net controllable variance, $250 F EX 23-19 Factory overhead cost variance report Medical Molded Products Inc. prepared the following factory overhead cost budget for the Trin Department for March 2012, during which it expected to use 10.000 hours for production: Variable overhead cost Indirect factory labor $29.000 Power and light 7.500 Indirect materials 13.000 Total variable cost $ 500 Foed overhead cost Supervisory salaries 534100 Depreciation of plant and equipment 24.300 Insurance and property taxes 22.100 Totalfixed cost 81.000 Total factory overhead cost 5130.500 1090 Chapter 23 Performance Evaluation Using Variances from Standard Costs Medical Molded Products has available 15.000 hours of monthly productive capacity in the Trim Department under normal business conditions. During March, the Trim Depart ment actually used 11.000 hours for production. The actual fixed costs were as budacted The actual variable overhead for March was as follows: Actual variable factory overhead cost Indirect factory labor $31.100 Power and light 8.100 Indirect materials 15.000 Total variable cost 554200 Construct a factory overhead cost variance report for the Trim Department for March OBS EX 23-20 Recording standards in accounts Gemini Manufacturing Company incorporates standards in its accounts and identifies ar ances at the time the manufacturing costs are incurred. Journalize the entries to record the following transactions a. Purchased 1.700 units of copper tubing on account at $68.90 per unit. The standard price is $65.00 per unit b. Used 1.000 units of copper tubing in the process of manufacturing 140 air conditioners Eight units of copper tubing are required, at standard, to produce one air conditioner EX 23-21 Recording standards in accounts The Assembly Department produced 2,000 units of product during June. Each unit required 1.75 standard direct labor hours. There were 3.800 actual hours used in the Assembly Department during June at an actual rate of $14.60 per hour. The standard direct labor rate is $15 per hour. Assuming direct labor for a month is paid on the fifth day of the following month, journalize the direct labor in the Assembly Department on June 30 OB.5 Income before income tax, 561,200 EX 23-22 Income statement indicating standard cost variances The following data were taken from the records of Gentry Company for December 2012 $ 22.000 390.000 Administrative expenses Cost of goods sold at standard Direct materials price variance unfavorable Direct materials Quantity wariance-favorable Direct laborate variance avorable Direct labor time variance unfavorable Variable factory Overhead controllable variance- vorable Foxed factory overhead volume variance unfavorable Interest expense Sales Selling expenses Prepare an income statement for presentation to management 2100 620.000 92 300 EX 23-23 Nonfinancial performance measures Ace, Inc. is an Internet retailer of golf equipment Customers onder golf equipment from the company, using an online catalog. The company processes these orders and deliver the requested product from its warehouse. The company wants to provide customers with an excellent purchase experience in order to expand the business through favorable word-of-mouth advertising and to drive repeat business. To help monitor performance the company developed a set of performance measures for its order placement and de livery process MEDICAL MOLDED PRODUCTS INC. Factory Overhead Cost Variance Report Trim Department For the Month Ended March 31, 2012 Productive capacity for the month: Actual productive capacity used for the month: hours hours Budget (at actual production) Actual Variances Favorable Unfavorable Favorable Variable factory overhead costs: Indirect factory labor Power and light Indirect materials Total Fixed factory overhead costs: Supervisory salaries Depreciation of plant and equip. Insurance and property taxes Total Total factory overhead cost Total controllable variances Fixed Factory OH Rate Net controllable variance(favorable) unfavorable Idle Hours Volume variance%(fav.) unfav. Total factory overhead cost variance(favorable) unfavorable Alternative Computation of Overhead Variances: Factory Overhead Applied costs Actual costs Balance Actual Factory Overhead Applied Factory Overhead Budgeted Factory Overhead for Amount Produced Variable cost Fixed cost Total Controllable Variance Volume Variance Total Factory Overhead Cost Variance Supporting calculation: Variable factory overhead rate: Budgeted total variable cost Budgeted hours Variable factory overhead rate Fixed factory overhead rate: Total fixed costs Productive capacity hours Fixed factory overhead rate Total Actual hours Applied costs