Question
Factory Overhead Variance Corrections The data related to Shunda Enterprises Inc.'s factory overhead cost for the production of 50,000 units of product are as
Factory Overhead Variance Corrections The data related to Shunda Enterprises Inc.'s factory overhead cost for the production of 50,000 units of product are as follows: Actual: Variable factory overhead Fixed factory overhead $218,200 157,300 Standard: 76,000 hrs. at $5.00 ($2.90 for variable factory overhead) 380,000 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 $377,700. Based on these data, the chief cost accountant prepared the following variance analysis: Variable factory overhead controllable variance: Actual variable factory overhead cost incurred $218,200 Budgeted variable factory overhead for 76,000 hours (220,400) Variance-favorable Fixed factory overhead volume variance: Normal productive capacity at 100% Standard for amount produced 75,000 hrs. (76,000) 1,000 hrs. Standard variable factory overhead rate $5.00 Productive capacity not used $(2,200) Variance-unfavorable Total factory overhead cost variance-unfavorable 5,000 $2,800 Compute the following to assist you in identifying the errors in the factory overhead cost variance analysis. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required. Variance Amount Favorable/Unfavorable eted Vahable factory overhead for 76,000 hours (220,400) Variance-favorable Fixed factory overhead volume variance: Normal productive capacity at 100% Standard for amount produced Productive capacity not used 75,000 hrs. (76,000) 1,000 hrs. Standard variable factory overhead rate x $5.00 Variance-unfavorable Total factory overhead cost variance-unfavorable $(2,200) 5,000 $2,800 Compute the following to assist you in identifying the errors in the factory overhead cost variance analysis. Enter a favorable variance as a negative number using a minum sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required. Variance Variable Factory Overhead Controllable Variance Fixed Factory Overhead Volume Variance Total Factory Overhead Cost Variance Amount Favorable/Unfavorable Favorable Favorable Favorable Feedback Check My Wor 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.
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