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Lexxx Company makes a widget that is known worldwide for its high quality! These widgets sell for $40 each. The standard cost card is shown

Lexxx Company makes a widget that is known worldwide for its high quality! These widgets sell for $40 each. The standard cost card is shown below:

Standard Cost Card - Lexxx Widget
DM 2.6 pounds X $4.00/# = $ 10.40
DL 0.50 DLH X $16/DLH = 8.00
FOH 0.50 DLH X $10/DLH = 5.00
(Variable = $2/DLH, Fixed = $8/DLH)
Standard Cost $ 23.40

This period, 9,000 widgets were produced. Normal capacity this period was 8,000 widgets. The following actual data was gathered:

  • Sales - the 9,000 widgets produced were sold for a total of $361,800.
  • DM - 24,000 pounds of DM were purchased and used in production at a cost of $86,400.
  • DL - 4,600 DLH were used at a total cost of $74,060.
  • V FOH - Actual Variable FOH was $9,800.
  • F FOH - Actual Fixed FOH was $33,000.

Let's examine fixed factory overhead (FFOH) variances.

The FFOH COST variance is

The budgeted FFOH for the period is

The FFOH EFFICIENCY variance is

The total FFOH variance for the period is

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