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5 March, 00:36

The following data relate to factory overhead cost for the production of 6,000 computers: Actual: Variable factory overhead $142,600 Fixed factory overhead 35,000 Standard: 6,000 hrs. at $28 168,000 If productive capacity of 100% was 10,000 hours and the total factory overhead cost budgeted at the level of 6,000 standard hours was $182,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $3.5 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

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  1. 5 March, 00:43
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    1. $4,400 Favorable

    2. $14,000 Unfavorable

    3. $9,600 Unfavorable

    Explanation:

    The computation of given question is shown below:-

    1. Variable factory overhead Controllable Variance

    = $142,600 - 6,000 * 24.5

    = $142,600 - $147,000

    = - $4,400

    = $4,400 Favorable

    Where, 24.5 = standard rate - fixed overhead rate

    = $28 - $3.5

    = $24.5

    2. Fixed factory overhead volume variance

    = $35,000 - 6,000 * $3.5

    = $35,000 - $21,000

    = $14,000 Unfavorable

    3. Total factory overhead cost variance

    = ($142,600 + $35,000) - (6,000 * $28)

    = $177,600 - $168,000

    = $9,600 Unfavorable
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