The data related to Osage Sporting Goods Company's factory overhead cost for the production of 60,000 units
Question:
The data related to Osage Sporting Goods Company's factory overhead cost for the production of 60,000 units of product are as follows:
Productive capacity at 100% of normal was 80,000 hours, and the factory overhead cost budgeted at the level of 76,000 standard hours was $490,000. Based upon these data, the chief cost accountant prepared the following variance analysis:
Identify the errors in the factory overhead cost varianceanalysis.
Transcribed Image Text:
$274,500 224,000 Standard: 76,000 hours at $6.30 (S3.50 for variable factory overhead 478,800 Actual Variable factory overhead Fixed factory overhead Variable factory overhead controllable variance: Actual variable factory overhead cost incurred Budgeted variable factory overhead for 76,000 hours 274,500 266,000 Variance-unfavorable $8,500 Fixed factory overhead volume variance: Normal productive capacity at 100% Standard for amount produced Productive capacity not used Standard variable factory overhead rate 80,000 hours 76,000 4,000 hours x $6.30 Variance-unfavorable 25,200 33,700 Total factory overhead cost variance-unfavorable
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In determining the volume variance the productive capacity not used 4000 hours should be multiplied ...View the full answer
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Related Book For
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
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