Calouiator Factory Overhead Cost Variances Weave Textiles Corporation began Janu

Question

Calouiator Factory Overhead Cost Variances Weave Textiles Corporation began January with a budget for 21,000 hours of production in the Weaving Department. The department has full capacity of 28,000 hours under normal business conditions. The budgeted overthead at the planned volumes at the beginning of January was as follows: Variable overhead Fioxed overhead Total The actual factory overhead was $90,000 for January. The actual fixed factory overhead was as budgeted. During January, the Weaving Department unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required. a. Determine the variable factory overhead controllable variance. $52,500 36,400 $88,900 had standard hours at actual production volume of 22,000 hours. Enter a favorable variance as a negative number using a minus sign and an b. Determine the fixed factory overhead volume variance Previous Next Submit A

Explanation / Answer

Standard Rate for Factory Overhead = Variable overhead of 52500/ budget for 21000 hrs. = 2.50

Standard Hour = 22000 Hour

Actual Factory Overhead = $ 53,600

Actual Variable Overhead = Actual Factory Overhead - Actual Fixed Factory Overhead

= 90000 - 36400

= 53600

Factory Overhead Cost Variance = Actual overhead - Standard Hours * Variable factory overhead rate

= 53,600 - 22,000 * 2.50

= 53,600- 55,000

= -1400 favorable

Volume Variance

Full capacity 28,000 - standard hours of 22,000 = 6,000

= 6000 * Fixed factory overhead rate $1.30

= $7800 (Unfavourable)

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