The standard specifications for an electric motor manufactured by XYZ Electric Co. follow:
Standard cost per unit:
Materials (2 lb  $5 per lb) . . . . . . . . . . . . . . . . . . . . . . . . . $10.00
Labor (4 hr  $12 per hr) . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.00
Factory overhead (4 hr  $3.38* per hr). . . . . . . . . . . . . . . . 13.52
Total standard cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $71.52
*$1.00 variable þ $2.38 fixed ¼ $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-variance method and the diagram format.

Transcribed Image Text:

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

Answer rating: 100% (QA)

Controllable Variance Actual FOH Cost 2975000 E... View the full answer