Exercise 11-5 The Stanton Supply Co. produces cleaning equipment for professiona
ID: 2471285 • Letter: E
Question
Exercise 11-5 The Stanton Supply Co. produces cleaning equipment for professional cleaners. At the start of the year, Stanton estimated variable overhead costs to be $15 per unit and total fixed overhead costs at $291,000, based on a volume of 66,000 units. The detail for the overhead estimates follows: Variable Overhead Indirect material ($8) $ 528,000 Utilities ($2) 132,000 Maintenance ($3) 198,000 Total variable overhead $ 858,000 Fixed Overhead Supervisor salaries $ 112,000 Depreciation 153,000 Other fixed overhead 26,000 Total fixed overhead $ 291,000 Total overhead costs $ 1,149,000 Actual costs for the year are as follows: Actual Production 52,900 units Variable Overhead Indirect material $ 447,000 Utilities 90,600 Maintenance 172,000 Total variable overhead $ 709,600 Fixed Overhead Supervisor salaries $ 123,000 Depreciation 132,000 Other fixed overhead 27,200 Total fixed overhead $ 282,200 Total overhead costs $ 991,800 Calculate the controllable overhead variances for variable and fixed overhead. (Enter all variances as a positive number.)
Calculate the controllable overhead variances for variable and fixed overhead. (Enter all variances as a positive number.)
Actual Units Produced (52,900) Variable Overhead Actual Flex Budget Variance Indirect material $ $ $ UnfavorableNeither Unfavorable nor FavorableFavorable Utilities FavorableNeither Unfavorable nor FavorableUnfavorable Maintenance Neither Unfavorable nor FavorableUnfavorableFavorable Total variable overhead UnfavorableNeither Unfavorable nor FavorableFavorable Fixed Overhead Supervisor salaries Neither Unfavorable nor FavorableUnfavorableFavorable Depreciation Neither Unfavorable nor FavorableFavorableUnfavorable Other fixed overhead FavorableUnfavorableNeither Unfavorable nor Favorable Total fixed overhead Neither Unfavorable nor FavorableUnfavorableFavorable Total Overhead costs $ $ $ Neither Unfavorable nor FavorableUnfavorableFavorable
Explanation / Answer
Standard Actual Actual rate per unit $ Estimated Variable Overhead per unit $15 Estimated Fixed Overhead 291000 No. of estimated units 66000 52900 Variable Overhead indirect Material ($8) 528000 447000 8.45 Utilities ($2) 132000 90600 1.71 Maintanence ($3) 198000 172000 3.25 Total variable overhead 858000 709600 Fixed Overhead Supervisor salary 112000 123000 Depreciation 153000 132000 Other Fixed overhead 26000 27200 Total Fixed Overhead 291000 282200 Total Overhead Cost 1149000 991800 Calculation of Controllable Variable and fixed overhead variance Variable Overhead Actual A Flex Budget Calculation of Flex Budget Variance A-F Indirect material 447000 423200 52900*8 23800 Unfavorable Utilities 90600 105800 52900*2 15200 Favorable Maintenance 172000 158700 52900*3 13300 Unfavorable Total variable overhead 709600 687700 21900 Unfavorable Fixed Overhead Supervisor salaries 123000 112000 same as standard 11000 Unfavorable Depreciation 132000 153000 as fixed expense 21000 Favorable Other fixed overhead 27200 26000 1200 Unfavorable Total fixed overhead 282200 291000 8800 Favorable Total Overhead costs 991800 978700 $ 13100 Unfavorable
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