Concept explainers
Concept introduction:
Fixed
The Fixed Overhead budget variance is the difference between the actual fixed overhead cost and budgeted fixed overhead cost. The formula to calculate the Fixed Overhead budget Variance is as follows:
Fixed Overhead Volume variance:
The Fixed Overhead Volume variance is the difference between the allocated fixed overhead cost and the budgeted fixed overhead cost. The formula to calculate the Fixed Overhead volume Variance is as follows:
Note: The allocated fixed overhead is calculated with the help of following formula:
To calculate:
Fixed Overhead Volume variance.
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Managerial Accounting
- Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches Branch Company provided the following information: Required: 1. Using the columnar approach, calculate the fixed overhead spending and volume variances. 2. Using the formula approach, calculate the fixed overhead spending variance. 3. Using the formula approach, calculate the fixed overhead volume variance. 4. Calculate the total fixed overhead variance.arrow_forwardVariable Overhead Spending and Efficiency Variances, Columnar and Formula Approaches Rath Company provided the following information: Required: 1. Using the columnar approach, calculate the variable overhead spending and efficiency variances. 2. Using the formula approach, calculate the variable overhead spending variance. 3. Using the formula approach, calculate the variable overhead efficiency variance. 4. Calculate the total variable overhead variance.arrow_forwardVariable Overhead Spending and Efficiency Variances, Columnar and Formula Approaches Aretha Company provided the following information: Required: 1. Using the columnar approach, calculate the variable overhead spending and efficiency variances. 2. Using the formula approach, calculate the variable overhead spending variance. 3. Using the formula approach, calculate the variable overhead efficiency variance. 4. Calculate the total variable overhead variance.arrow_forward
- Performance Report for Variable Variances Humo Company provided the following information: Required: Prepare a performance report that shows the variances for each variable overhead item (inspection and power).arrow_forwardA. Describe the two variances between the actual costs and the standard costs for factory overhead. B. What is a factory overhead cost variance report?arrow_forwardThe variable overhead rate variance is caused by the sum between which of the following? A. actual and standard allocation base B. actual and standard overhead rates C. actual and budgeted units D. actual units and actual overhead ratesarrow_forward
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- Deluxe, Inc. produced 1,000 units of the company's product in 2018. The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.05 per yard. The accounting records showed that 2,600 yards of cloth were used and the company paid $1.10 per yard. Standard time was two direct labor hours per unit at a standard rate of $10.75 per direct labor hour. Employees worked 1,400 hours and were paid $10.25 per hour. Read the requirements. Requirement 1. What are the benefits of setting cost standards? Standard costing helps managers do the following: Requirement 2. Calculate the direct materials cost variance and the direct materials efficiency variance as well as the direct labor cost and efficiency variances. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC actual cost; AQ = actual…arrow_forwardAlso, compute the fixed overhead production volume variancearrow_forwardData table Variable manufacturing overhead costs incurred Variable manufacturing overhead cost rate Fixed manufacturing overhead costs incurred Fixed manufacturing overhead costs budgeted Denominator level in machine-hours Standard machine-hour allowed per unit of output Units of output Actual machine-hours used Ending work-in-process inventory $687,100 $9 per standard machine-hour $146,500 $141,000 70,500 1.2 64,800 75,500 0arrow_forward
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