Frogue Corporation uses a standard cost system. The following information was pr

Question

Frogue Corporation uses a standard cost system. The following information was provided for the period that just ended:

Actual price per kilogram $3.00
Actual kilograms of material used 31,000
Actual hourly labor rate $18.10
Actual hours of production 4,900 labor hours
Standard price per kilogram $2.80
Standard kilograms per completed unit 6 kilograms
Standard hourly labor rate $18.00
Standard time per completed unit 1 hr.
Actual total factory overhead $34,900
Fixed factory overhead $18,000
Standard fixed factory overhead rate $1.20 per labor hour
Standard variable factory overhead rate $3.80 per labor hour
100% of normal capacity 15,000 hours
Plant operated during the period 10,000 hours
Units completed during the period 5,000

The total factory overhead cost variance is:
a. $3,900 favorable
b. $8,100 favorable
c. $9,900 unfavorable
d. $8,100 unfavorable

Explanation / Answer

Total factory cost variances = (Standard hour for actual output) x (Standard rate per hour) - Actual overheads incurred Standard hour for actual output) x (Standard rate per hour) = 5000 units x 1 hour/unit x ($1.2 + $3.8)/hour = $25000 Thus, variance = 25000 -34900 = $9900 Unfavourable. Again, the variance is unfavourable because we spend more compared to the standard. Hope this helps!

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.