Question

Check my work Required information [The following information applies to the questions displayed below.] Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 55,200 machine hours per year, which represents 27,600 units of output. Annual budgeted fixed factory overhead costs are $276,000 and the budgeted variable factory overhead cost rate is $3.70 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 21,500 units, which took 44,200 machine hours. Actual fixed factory overhead costs for the year amounted to $264,800 while the actual variable overhead cost per unit was $3.60. Based on the information provided above, calculate the following factory overhead variances for the year. Indicate whether each variance is favorable (F) or unfavorable (U). (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) (a) (b) (c) Total overhead variance Total flexible-budget variance Production volume variance Unfavorable Favorable 61,000 Unfavorable $

Answer 1

Page No ③ Answer @ @ Standard Total enhead variante time for producing one unit of op < 55200 24600 = 2hro per un hro per unit of output Budgeted fixed overhead - $246000 Budgeted units produced during the year = 2X 21500 units = 43000 hours 276000 Total fixed .)-264800 . overhead variance = (43000 X 55200 * = (43000 x 5) - 264800 = 215000 - 264800 - 49800 (0) standand variable overhead code = $3.40 per unit. pot al variable overhead Keriance = (21500 x $3:40) -- (21500 x $3.60) 99550 - 74400

€ 2150 CF) Page No @ Total overhead variance = 49800 (0) + 2150 (7) = 44650(0) .:: Total overhead verance - $44650 un favorable Total flexible budget variance Total flexible budget variance = ( 276000 + (31500x3.40)) – (264800 + (a1500x3.60)) = 355550 – 342200 = 13350 (A) 1. Total flexible budcels variance = $13350 Favorable 0 @ Riaduction volume variance Production volume variance = ( berlgeted hos – standard brastequina . for actival production 3 x standard overhead radelny

Page. No Production volume variance = ( 55200 – (q1500xa)) x 296000 55900 = (55000 - 43000) * 5 (5 200 x 5 e $61000 CAD volume variance = $ 61000 favorable 11. Poroducition @ sin Jocuinal entries Total flexible boalget vorance = $13350 Particular Debit 1 Credit factory overheads $ 13350 coof of goods sold $13350 Factory overheads coook in process @10%. $1335 froished goods @20%. $2670 cost of goods sold @ 70% $9345 $13350