The following information is for the standard and actual costs for the Carson Pa
ID: 2464999 • Letter: T
Question
The following information is for the standard and actual costs for the Carson Palmer Corporation.
Standard Costs:
Budgeted units of production - 16,000 (80% of capacity)
Standard labor hours per unit – 4 Standard labor rate $26 per hour
Standard material per unit - 8 lbs.
Standard material cost - $ 12 per lb.
Budgeted fixed overhead $640,000
Standard variable overhead rate - $15 per labor hour.
Fixed overhead rate is based on budgeted labor hours at 80% capacity.
Actual Cost:
Actual production - 16,500 units
Actual fixed overhead - $640,000
Actual variable overhead - $1,000,000
Actual labor - 65,000 hours, total labor costs $1,700,000
Actual material purchased and used - 130,000 lbs, total material cost $1,600,000
Actual variable overhead - $1,000,000
1) Find The total Factory Overhead Controllable Variance.
Explanation / Answer
Total Factory Overhead Controllable variance =
= Actual variable overhead - Variable expenses for standard hours allowed
= 1,000,000 - 960,000
= 40,000 (U)
Working:
1. Variable expensed for standard hour = Total Standard Production * Standard Labour hour per unit * variable overhead rate
= 16000 * 4 *15 = 960,000
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