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 $11 per unit and total fixed overhead costs at $293,000, based on a volume of 60,000 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) $ 480,000 Utilities ($2) 120,000 Maintenance ($3) 180,000 Total variable overhead $ 780,000 Fixed Overhead Supervisor salaries $ 115,000 Depreciation 149,000 Other fixed overhead 29,000 Total fixed overhead $ 293,000 Total overhead costs $ 1,073,000 Stanton Supply Company Actual Units Produced (52,100) Variable Overhead Actual Flex Budget Variance Indirect material Utilities Maintenance Total variable overhead Fixed Overhead Supervisor salaries Depreciation Other fixed overhead Total fixed overhead Total Overhead costs

Explanation / Answer

Variable overhead Actual Flexible Variance Indiect material 433000 416800    [52100*8] 16200 U Utilities 93200 104200    [52100*2] -11000 F Maintenance 169000 156300    [52100*3] 12700 U Total variable overhead 695200 677300 17900 U Fixed overhead Supervisor salaries 129000 115000 14000 U Depreciation 142000 149000 -7000 F Other fixed overhead 28500 29000 - 500 F Total fixed overhead 299500 293000 6500 U Total overhead cost 994700 970300 24400 U

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