The standard specifications for an electric motor manufactured by B&B Electric Corporation follow:

Standard cost per unit:

Materials (2 lb × $5 per lb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10.00

Labor (4 hr × $6 per hr) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.00

Factory overhead (4 hr × $3.38* per hr) . . . . . . . . . . . . . . . . . . . . . . . . . . 13.52

Total standard cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $47.52

*$1.00 variable + $2.38 fixed = $3.38

Factory overhead rates are based on a normal 70% capacity and use the following flexible budget:

The actual production was 2,500 motors, and factory overhead costs totaled $29,750.
Required:
Calculate the factory overhead variances using the two-variancemethod.

Transcribed Image Text:

Normal 70% 85% 100% Motors to be produced. Variable overhead8 Fixed overhead.... 2,100 S 8,400 $20,000 2,550 $10,200 $20,000 3,000 $12,000 $20,000