The data related to Danville Sporting Goods Companys factory overhead cost for the production of 40,000 units

The data related to Danville Sporting Goods Company’s factory overhead cost for the production of 40,000 units of product are as follows:

Productive capacity at 100% of normal was 100,000 hours, and the factory overhead cost budgeted at the level of 105,000 standard hours was $720,000. Based on these data, the chief cost accountant prepared the following variance analysis:

Identify the errors in the factory overhead cost varianceanalysis.

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Actual Variable factory overhead Fixed factory overhead 105,000 hrs. at $9.00 ($5.75 for variable factory overhead) $269,000 325,000 945,000 Standard: Variable factory overhead controllable variance Actual variable factory overhead cost incurred Budgeted variable factory overhead for 105,000 hours $600,000 603,750 Variance-favorable Fixed factory overhead volume variance: Normal productive capacity at 100% Standard for amount produced Productive capacity not used Standard variable factory overhead rate -$3,750 100,000 hrs. 105,000 5,000 hrs. X $9.00 Variance-unfavorable 45,000 $41,250 Total factory overhead cost variance-unfavorable