Factory Overhead Variance Corrections

The data related to Shunda Enterprises Inc.s factory overhead cost for the production of 60,000 units of product are as follows:

Actual:	Variable factory overhead	$261,300
	Fixed factory overhead	188,400
Standard:	91,000 hrs. at $5 ($2.90 for variable factory overhead)	455,000

Productive capacity at 100% of normal was 90,100 hours, and the factory overhead cost budgeted at the level of 91,000 standard hours was $452,300. Based on these data, the chief cost accountant prepared the following variance analysis:

Variable factory overhead controllable variance:
Actual variable factory overhead cost incurred	$261,300
Budgeted variable factory overhead for 91,000 hours	263,900
Variancefavorable			$(2,600)
Fixed factory overhead volume variance:
Normal productive capacity at 100%	90,100	hrs.
Standard for amount produced	91,000
Productive capacity not used	900	hrs.
Standard variable factory overhead rate	x $5
Varianceunfavorable			4,500
Total factory overhead cost varianceunfavorable			$1,900

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
Variable Factory Overhead Controllable Variance		Favorable
Fixed Factory Overhead Volume Variance		Favorable
Total Factory Overhead Cost Variance		Favorable