Question
Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of 6,000 computers: Actual: Variable factory overhead Fixed factory
Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of 6,000 computers: Actual: Variable factory overhead Fixed factory overhead Standard: 6,000 hrs. at $21 $97,500 42,500 126,000 If productive capacity of 100% was 10,000 hours and the factory overhead cost budgeted at the level of 6,000 standard hours was $143,000, 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 Controllable variance Amount Favorable/Unfavorable Favorable Volume variance Total factory overhead cost variance: Feedback 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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