Gerhan Company's flexible budget for the units actually manufactured in May shows $15,640 of total factory overhead; this output level represents 70% of available capacity. During May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH), based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity. The company spent 5,000 DLHs and incurred $16,500 of total factory overhead cost during May, including $6,800 for fixed factory overhead.
What is the total factory overhead flexible-budget variance for Gerhan Company in May?
What is the factory overhead efficiency variance for Gerhan Company in May, under the assumption that the company uses a two-variance breakdown (decomposition) of the total overhead variance?
What is the variable factory overhead spending variance in May, assuming Gerhan uses a four-variance breakdown (decomposition) of the total overhead variance?
What is the factory overhead efficiency variance for May under the assumption that Gerhan uses a four-variance breakdown (decomposition) of the total overhead variance?
What is the fixed factory overhead spending variance in December for Gerhan Company?

Answer rating: 100% (QA)

Answer Lets break down the problem step by step to calculate the various variances Total Factory Overhead FlexibleBudget Variance The total factory overhead flexiblebudget variance is calculated as th... View the full answer