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Factory Overhead Cost Variances The following data relate to factory overhead co

ID: 2385048 • Letter: F

Question

Factory Overhead Cost Variances
The following data relate to factory overhead cost for the production of 4,000 computers:

Actual: Variable factory overhead 130,000
Fixed Factory overhead 30,875
Standard: 5000 hr at 32 160,000


If productive capacity of 100% was 6,500 hours and the factory overhead cost budgeted at the level of 5,000 standard hours was $167,125, determine the variable factory overhead Controllable Variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $4.75 per hour. Use the minus sign to enter favorable variances as negative numbers.

Explanation / Answer

CONTROLLABLE VARIANCE =actual factory overhead - budgeted allowance on Std hours =130000+5000*4.75-167125 = -13375 b)volume variance is expressed as: (Actual Production - Budgeted Production) x Budgeted Overhead Rate c)Total factory overhead cost variance = total overhead cost absorbed - total over head cost incurred.. I am sure you can just put in values and get the answer..(not having calculator right now with me)