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Standard Costing Acme Corp. applies overhead to production using a rate of $75 per machine hour ($35 variable, $40 fixed). Acme actually produced 15,000 units
Standard Costing
Acme Corp. applies overhead to production using a rate of $75 per machine hour ($35 variable, $40 fixed). Acme actually produced 15,000 units and incurred actual overhead of $3,710,000 (of which $1,495,000 was variable overhead) while using 43,500 machine hours. The overhead standards assume each product would use three machine hours. The budgeted number of units was 18,000.
Required:
- Calculate the VOH spending variance.
- Calculate the VOH efficiency variance.
- Calculate the FOH budget variance.
- Calculate the FOH volume variance.
- Reconcile the OH Variance with your calculations above.
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