The standard fixed overhead costs budget for CTF of 800 units with detail information as follows: 3hours/unit and $22 per labour hour. The actual fixed overhead costs budget of 1,000 units is $55,000. Analyse the fixed overhead costs variance

The standard fixed overhead costs budget for CTF of 800 units with detail information as follows: 3hours/unit and $22 per labour hour. The actual fixed overhead costs budget of 1,000 units is $55,000. Analyse the fixed overhead costs variance

Name: The standard fixed overhead costs budgetfor CTF of 800 units with det
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Description: The standard fixed overhead costs budgetfor CTF of 800 units with detail informationas follows: 3hours/unit and $22 per labourhour.The actual fixed overhead costs budget of1,000 units is $55,000.Analyse the fixed overhead costs variance

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Production (in units) Overhead Variable overhead Fixed overhead Total overhead Flexible Budget at 80% Capacity 54,250 $ 298,375 54,250 $ 352,625 1. Standard overhead rate 2. Standard overhead applied 3. Overhead variance Actual Resulta 50,800 $361,100 1. Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 27,125 DLH, computed as 54,250 units * 0.5 DLH per unit. 2. Compute the standard overhead applied. 3. Compute the total overhead variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)
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