Fletcher Company cellected the following data regarding production of one of ns
ID: 2438154 • Letter: F
Question
Fletcher Company cellected the following data regarding production of one of ns preducts. Compuce the fiwed overhead cost variance Direct labor standard (2 hrs. S13.69/hr.) Actual direct labor hours Budgeted units Actual finished units produced Standard variable OH rate 2 hrs. $16.83/hr. Standard fixed CH rate (572,308/59,08 units) Actual cost of variable overhead costs incurred Actual cost of fixed overhesd costs incurred S 27.2 20 per finished unit 99,580 hrs 51,880 units 49,080 units S 32.e per finished unit 9.70 per unit $1,568,080 $ 575,880 Multipie Cholce 24,000 untsvorabls $16.000 unfavorable $24.000 fevorable 93,700avorabls 9300 unaarableExplanation / Answer
Fixed Overhead Cost Variance = Recovered Fixed Overhead - Actual Fixed Overhead
Recovered Fixed Overhead = Recovery Rate * Actual Units
Recovered Fixed Overhead = $9.7 * 49000 = $475300
Actual Fixed Overhead = $575000
Fixed Overhead Cost Variance = $475300 - $575000
Fixed Overhead Cost Variance = $99700 (UNFAVORABLE)
THEREFORE, THE CORRECT ANSWER IS E) $99700 UNFAVOURABLE
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