Fixed-Overhead Budget and Volume Variances. (Select "None" and enter "0" for no effect (i.e., zero variance).)

Fixed-Overhead Budget And Volume Variances

(Hours = Direct-Labor Hours)

(1)

(2)

(3)

Actual Fixed Overhead

Budgeted Fixed Overhead

Fixed Overhead Applied To Work In Process

Standard Allowed Hours

Standard Fixed-Overhead Rate

not attempted

not attempted

hours

per hour

$75,000selected answer incorrect

not attempted

not attempted

Favorableselected answer correct

not attempted

Unfavorableselected answer correct

Fixed-overhead budget variance

Fixed-overhead volume variance

Calgary Paper Company produces paper for photocopiers. The company has developed standard overhead rates based on a monthly capacity of 80,000 direct-labor hours as follows:

Calgary Paper Company produces paper for photocopiers. The company has developed standard overhead rates based on a monthly capacity of 80,000 direct-labor hours as follows:

Standard costs per unit (one box of paper):
Variable overhead (3 direct-labor hours @ $4)	$	12
Fixed overhead (3 direct-labor hours @ $12)		36
Total	$	48

During April, 26,000 units were scheduled for production: however, only 20,000 units were actually produced. The following data relate to April.

1. Actual direct-labor cost incurred was $1,425,000 for 75,000 actual hours of work.

2. Actual overhead incurred totaled $1,372,500, of which $472,500 was variable and $900,000 was fixed.

Required:

Prepare two exhibits similar to Exhibit 11-6 and Exhibit 11-8, which show the following variances. State whether each variance is favorable or unfavorable, where appropriate.

1. Variable-overhead spending variance.

2. Variable-overhead efficiency variance.

3. Fixed-overhead budget variance.

4. Fixed-overhead volume variance.