Solution 1:
Controllable variance | |||
Particulars | Amount | ||
Total actual overhead | $81,700 | ||
Flexible budget overhead: | |||
Variable overhead (32000/8000*9000) | $36,000 | ||
Fixed overhead | $48,000 | ||
Total | $84,000 | ||
Overhead controllable variance | $2,300 | Favorable |
Solution 2:
Volume Variance | ||
Fixed overhead applied ($48,000/8000*9000) | $54,000 | |
Budgeted fixed overhead | $48,000 | |
Volume variance | $6,000 | Favorable |
Solution 3:
Blaze Corp. | ||||
Overhead variance report | ||||
For the Month Ended March 31 | ||||
Expected Production volume | 80% of capacity | |||
Production level achieved | 90% of capacity | |||
Volume variance | $6,000 Favorable | |||
Particulars | Flexible Budget | Actual | Variance | Fav/Unfav. |
Variable overhead costs: | ||||
Indirect materials | $11,250.00 | $10,000.00 | $1,250.00 | Favorable |
Indirect labor | $18,000.00 | $16,000.00 | $2,000.00 | Favorable |
Power | $4,500.00 | $4,500.00 | $0.00 | No Variance |
Maintenance | $2,250.00 | $3,000.00 | $750.00 | Unfavorable |
Total variable overhead cost | $36,000.00 | $33,500.00 | $2,500.00 | Favorable |
Fixed overhead costs: | ||||
Rent of factory building | $12,000.00 | $12,000.00 | $0.00 | No Variance |
Depreciation machinery | $20,000.00 | $19,200.00 | $800.00 | Favorable |
Taxes and insurance | $2,400.00 | $3,000.00 | $600.00 | Unfavorable |
Supervisory salaries | $13,600.00 | $14,000.00 | $400.00 | Unfavorable |
Total fixed overhead cost | $48,000.00 | $48,200.00 | $200.00 | Unfavorable |
Total costs | $84,000.00 | $81,700.00 | $2,300.00 | Favorable |
Required 2 Required 1 Required 3 Compute the overhead volume variance. Classify as favorable or unfavorable....
Blaze Corp. applies overhead on the basis of direct labor hours. For the month of March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following budget. Operating Levels Overhead Budget 80% Production in units 10,000 Standard direct labor hours 20,000 Budgeted overhead Variable overhead costs Indirect materials $ 21,000 Indirect labor 25,000 Power 6,800 Maintenance 5,200 Total variable costs 58,000 Fixed overhead costs Rent of factory building 24,000 Depreciation—Machinery 28,000...
Exercise 21-21 Overhead controllable and volume variances; overhead variance report LO P4 James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following overhead budget: Operating Levels 80% 10,000 25,000 Overhead Budget Production in units Standard direct labor hours Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable costs Fixed overhead costs...
Blaze Corp. applies overhead on the basis of direct labor hours. For the month of March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following budget: Operating Levels Overhead Budget 80% Production in units 10,000 Standard direct labor hours 30,000 Budgeted overhead Variable overhead costs Indirect materials $ 30,000 Indirect labor 40,000 Power 8,000 Maintenance 3,000 Total variable costs 81,000 Fixed overhead costs Rent of factory building 31,000 Depreciation—Machinery 45,000...
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James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company planned production of 10,000 units (80% of its production capacity of 12.500 units) and prepared the following overhead budget: Operating Levels 8004 10,000 26,000 Overhead Budget Production in units Standard direct labor hours Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable costs Fixed overhead costs Rent of factory building Depreciation-Machinery Supervisory salaries Total fixed costs Total overhead...
James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following overhead budget: Operating Levels Overhead Budget 80% Production in units 10,000 Standard direct labor hours 26,000 Budgeted overhead Variable overhead costs Indirect materials $ 15,600 Indirect labor 26,000 Power 7,800 Maintenance 2,600 Total variable costs 52,000 Fixed overhead costs Rent of factory building 22,000 Depreciation—Machinery...
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