The overhead budget for Hugh Demand Ltd for the year to 30 June 2016 wasestimated on 20,000
Question:
The overhead budget for Hugh Demand Ltd for the year to 30 June 2016 wasestimated on 20,000 direct labour hours.
Using this base, the overhead recovery rate per direct labour hour was determined as:
Fixed costs ($216,000) $10.80
Variable costs $ 8.10
$18.90
Actual results achieved for the year were:
Fixed costs $220,500
Variable costs $170,940
Direct labour hours 21,000 hours
Required:
Calculate the factory overhead spending (budget) variance and capacity(volume) variance.
Specify whether the Spending Variance and the Capacity Variance are Favourable orUnfavourable.
Your answer:
Actual | Flexible Budget | Applied | ||||||
$ | Fixed | $ | hrs x $ | |||||
$ | Variable | $ | ||||||
$ | $ | $ | ||||||
$ | $ | |||||||
Overhead Spending Variance | Overhead Capacity Variance | |||||||
$ | ||||||||
Over applied Total Variance | ||||||||
Management Accounting
ISBN: 9781760421144
7th Edition
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton