Exercise $8-15$

Calculating Factory Overhead

The standard capacity of a factory is $8,000$ units per month. Cost and production data follow:

Standard application rate for fixed overhead.....$$1\mathrm{.}50$ per unit

Standard application rate for variable overhead...$$0\mathrm{.}50$ per unit

Production $-$ Month $1...7,400$ Units

Production $-$ Month $2....\mathrm{.}8,200$ units

Actual factory overhead $-$ Month $1$

$$15,100$

Actual factory overhead $-$ Month $2$

$$17,200$

Calculating Factory Overhead using the production volume variance.

The standard Calculate the amount of factory overhead allowed for the actual volume of production each month and the variance between budgeted and actual overhead for each month. Use $"$F$"$ and $"$U$"$ to designate favorable and unfavorable variances. If an amount is zero, enter $"$O$"$ and use $"$N$/$A$"$ if the variance is zero. Enter all amounts as positive numbers.