break down the formulas in the variance descriptions: Variable overhead Expenses $ 200,000 $ 198,000 $ 292,500
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Question:
break down the formulas in the variance descriptions:
Variable overhead Expenses | $ 200,000 | $ 198,000 | $ 292,500 |
Fixed overhead Expenses | $ 265,000 | $ 247,500 | $ 365,625 |
Units Produced | 65,000 | 44,000 | |
Machine Hours | 80,000 | 66,000 | 97,500 |
(a) and (b)
Statement Showing Calculation of Variance | |||
Particulars | Formula | Amount | Status |
Variable Cost Variance | (Total std. Cost for Actual Output – Total Actual Cost for productive Hrs.) | 92,500 | Favourable |
Variable Rate Variance | (Std. Rate/Hr. – Actual Rate/Hrs.) x Actual Productive Hrs. | 40,000 | Favourable |
Variable Efficiency Variance | (Std. Hrs. for Actual Output – Actual Productive Hrs.) x Std. Rate/Hrs. | 52,500 | Favourable |
Fixed Cost Variance | (Std. Fixed Overhead for Actual Output – Actual Fixed Overhead) | 100,625 | Favourable |
Fixed Cost Expenditure Variance | (Budgeted Fixed Overhead for Budgeted Output – Actual Fixed Overhead) | (17,500) | Adverse |
Fixed Cost Volume Variance | (Actual Output – Budgeted Output) x Std. Fixed Overhead/Unit | 118,125 | Favourable |
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