Calculating Fixed Manufacturing Overhead Capacity Variances
Crystal Ball Company (CBC) bases its fixed overhead rate on practical capacity of 30,000 units per year. Budgeted and actual results for the most recent year follow:
| Budgeted | Actual |
Fixed manufacturing overhead | $600,000 | $510,000 |
Number of units produced | 20,000 | 23,000 |
Required:
Calculate the following for CBC:
1.Fixed overhead rate based on practical capacity.
2. Fixed overhead spending variance.
3. Expected (planned) capacity variance.
4. Unexpected (unplanned) capacity variance.
5. Total over- or underapplied fixed manufacturing overhead
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