The data related to Shunda Enterprises Inc. s factory overhead cost for the production of 100,000 units
Question:
The data related to Shunda Enterprises Inc.’ s factory overhead cost for the production of 100,000 units of product are as follows:
Productive capacity at 100% of normal was 130,000 hours, and the factory overhead cost budgeted at the level of 132,000 standard hours was $ 956,000. Based on these data, the chief cost accountant prepared the following variance analysis:
Identify the errors in the factory overhead cost varianceanalysis.
Transcribed Image Text:
Variable factory overhead Fixed factory overhead 132,000 hrs. at $7.30 i$3.50 for variable factoryoverhead) $458,000 494,000 963,600 Actual Standard Variable factory overhead controllable variance: Actual variable factory overhead cost incurred Budgeted variable factory overhead for 132000 hours 462 000 458,000 Variance-favorable - 4000 Fixed factory overhead volume variance: Normal productive capacity at 100% Standard for amount produced Productive capacity not used tandard variable factory overhead rate 130,000 hrs. 132000 2,000 hrs. x $7.30 Variance-unfavorable 14,600 $10,000 Total factory overhead cost variance-unfavorable
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Related Book For
Financial And Managerial Accounting
ISBN: 9781337119207
14th Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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