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

Question

he Stanton Supply Co. produces cleaning equipment for professional cleaners. At the start of the year, Stanton estimated variable overhead costs to be $12 per unit and total fixed overhead costs at $287,000, based on a volume of 63,000 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) $ 504,000 Utilities ($2) 126,000 Maintenance ($3) 189,000 Total variable overhead $ 819,000 Fixed Overhead Supervisor salaries $ 125,000 Depreciation 140,000 Other fixed overhead 22,000 Total fixed overhead $ 287,000 Total overhead costs $ 1,106,000

Explanation / Answer

Elements of overhead Actual for 49900 units Flexible for 49900 units Variance Variable Overhead Indirect material $ 4,36,000.00 $3,99,200.00 36800 Unfavourable Utilities $     90,100.00 $    99,800.00 9700 Favourable Maintenance $ 1,68,000.00 $1,49,700.00 18300 Unfavourable Total variable Overhead $ 6,94,100.00 $6,48,700.00 45400 Unfavourable Fixed Overhead Supervisor salaries $ 1,27,000.00 $1,25,000.00 2000 Unfavourable Depreciation $ 1,32,000.00 $1,40,000.00 8000 Favourable Other fixed overhead $     25,700.00 $    22,000.00 3700 Unfavourable Total fixed overhead $ 2,84,700.00 $2,87,000.00 2300 Favourable Total Overhead costs $ 9,78,800.00 $9,35,700.00 43100 Unfavourable

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