The Stanton Supply Co. produces cleaning equipment for professional cleaners. At

Question

The Stanton Supply Co. produces cleaning equipment for professional cleaners. At the start of the year, Stanton estimated variable overhead costs to be $10 per unit and total fixed overhead costs at $290,000, based on a volume of 67,000 units. The detail for the overhead estimates follows:

Actual costs for the year are as follows:

Calculate the controllable overhead variances for variable and fixed overhead. (Enter all variances as a positive number.)

Variable Overhead Indirect material ($8) $ 536,000 Utilities ($2) 134,000 Maintenance ($3) 201,000 Total variable overhead $ 871,000 Fixed Overhead Supervisor salaries $ 116,000 Depreciation 145,000 Other fixed overhead 29,000 Total fixed overhead $ 290,000 Total overhead costs $ 1,161,000

Explanation / Answer

Calculate the controllable overhead variances for variable and fixed overhead. (Enter all variances as a positive number.) Stanton Supply Company Actual Units Produced (49,900) Variable Overhead Actual Flex Budget Variance Indirect material $ 424000 $ 399200 $ 24800 Utilities 96,000 99800 3,800 Maintenance 1,58,000 149700 8300 Total variable overhead 678000 648700 36900 Fixed Overhead Supervisor salaries 1,35,000 116000 19000 Depreciation 1,50,000 150000 0 Other fixed overhead 27,600 29,000 1,400 Total fixed overhead 3,12,600 2,95,000 20,400 Total Overhead costs $ 9,90,600 $ 9,43,700 $ 57,300

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