The standard cost and actual costs for factory overhead for the manufacture of 2

Question

The standard cost and actual costs for factory overhead for the manufacture of 2500 units of actual production are as follows
Fixed overhead (based on 10000 hours) 3 hours per unit @ $0.80 per hour
Variable overhead 3 hours per unit @ $2.00 per hour
Total variable cost $18000 Total fixed cost $8000
The amount of the fixed factory overhead volume variance is A-$2000 favorable B-$2000 unfavorable C-$2500 unfavorable D-$0
The amount of the variable factory overhead controllable variance is A-$2000 unfavorable B-$3000 favorable C-$0 D-$3000 unfavorable The standard cost and actual costs for factory overhead for the manufacture of 2500 units of actual production are as follows
Fixed overhead (based on 10000 hours) 3 hours per unit @ $0.80 per hour
Variable overhead 3 hours per unit @ $2.00 per hour
Total variable cost $18000 Total fixed cost $8000
The amount of the fixed factory overhead volume variance is A-$2000 favorable B-$2000 unfavorable C-$2500 unfavorable D-$0
The amount of the variable factory overhead controllable variance is A-$2000 unfavorable B-$3000 favorable C-$0 D-$3000 unfavorable
Fixed overhead (based on 10000 hours) 3 hours per unit @ $0.80 per hour
Variable overhead 3 hours per unit @ $2.00 per hour
Total variable cost $18000 Total fixed cost $8000
The amount of the fixed factory overhead volume variance is A-$2000 favorable B-$2000 unfavorable C-$2500 unfavorable D-$0
The amount of the variable factory overhead controllable variance is A-$2000 unfavorable B-$3000 favorable C-$0 D-$3000 unfavorable

Explanation / Answer

The amount of the fixed factory overhead volume variance is=Actual Output x FOAR- Budgeted Output x FOAR

2,500*3*0.8-$8,000=-$2,000 unfavourable

The amount of the variable factory overhead controllable variance is =Actual Output x VOAR- Budgeted Output x VOAR=2,500*3*2.00-$15,000=-$3,000 unfavorable

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