The normal capacity of a factory is 10 000 units per
The normal capacity of a factory is 10,000 units per month. Cost and production data follow:
Standard application rate for fixed overhead . . . . . . . . . . . . . ...$1.00 per unit
Standard application rate for variable overhead . . . . . . . . ..... $2.00 per unit
Production–Month 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,500 units
Production–Month 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000 units
Actual factory overhead–Month 1. . . . . . . . . . . . . . . . . . . . . . . . . .. $ 30,500
Actual factory overhead–Month 2. . . . . . . . . . . . . . . . . . . . . . . . .... $ 32,250
Calculate the amount of factory overhead allowed for the actual volume of production each month and the variance between budgeted and actual overhead for each month.

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