Question
Factory overhead variances: Company ABC has provided you with the following information and has asked you to determine the factory overhead variances using the two
Factory overhead variances:
Company ABC has provided you with the following information and has asked you to determine the factory overhead variances using the two and three variance methods.
Actual factory overhead ......................................................$10,000
Actual labor hours worked.....................................................4400
Standard hours allowed for this job........................................4500
F.O. rates:
Fixed = $4500/5000[remember 5000 would then be the normal capacity] = $.90/hour
Variable = $7500/5000 = $1.50/hour
1. Determine the controllable and volume variances
2. Determine the spending, idle capacity, and efficiency variances.
MAKE SURE YOU LABEL EACH AS FAVORABLE OR UNFAVORABLE OR THEY ARE INCORRECT
Complete variance analysis:
Given the following information for Company XYZ, find all 9 variances.
{Material price usage and material quantity, 2 labors, 2 variance and 3 variance factory overhead....not the material purchases price variance}
Company XYZ has a budgeted monthly normal capacity of 15,000 direct labor hours with a standard production of 7500 units at that capacity. Standard costs are as follows: [so it takes 2 hours to make one.]
Material..............3 lbs. @ $.75/lb
Labor.................$13.50/dlh
Overhead..........Fixed is $7500; Variable is $1.20/hr.
During April actual factory overhead was $25,250. 14,500 labor hours cost $188,500. 7000 units were produced using 21,000 pounds of material that cost $.78/lb.
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