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iris [78.8K]
3 years ago
10

Factory Overhead Cost Variances Blumen Textiles Corporation began April with a budget for 43,000 hours of production in the Weav

ing Department. The department has a full capacity of 57,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the beginning of April was as follows: Variable overhead $146,200 Fixed overhead 102,600 Total $248,800 The actual factory overhead was $251,800 for April. The actual fixed factory overhead was as budgeted. During April, the Weaving Department had standard hours at actual production volume of 45,000 hours. Determine the variable factory overhead controllable variance and the fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required. a. Variable factory overhead controllable variance: $ b. Fixed factory overhead volume variance: $
Business
1 answer:
stich3 [128]3 years ago
5 0

Answer:

a. Controllable Variance  = 3,800  <u>(</u>Favorable)

b. Volume Variance = 21,600 (Unfavorable)

Explanation:

a. Controllable Variance

Actual variable factory Overhead( 251,800 - 102,600)           149,200

<u>Standard Variable factory Overhead at actual Production</u>

Standard Hours at actual Production (A)                     45,000

Variable Factory overhead Rate (B)                           <u>   3.4    </u>

(146,200/ 43,000)

Standard variable factory Overhead (A*B)                                 <u>153,000</u>

Controllable Variance                                                                <u> 3,800 </u>F

b. Fixed factory Overhead volume variance

Volume variance:

Volume at 100% of normal capacity                   57,000

Less: Standard hours                                           <u>45,000</u>

                                                                              12,000

Fixed Overhead rate (B) (102,600/ 57,000)      <u>    1.8  </u>

Volume Variance (A*B)                                       <u>21,600 </u>(Unfavorable)

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