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

Question

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: Standard Costs Fixed overhead (based on 10,000 hours) 3 hoursS.80 per hour Variable overhead 3 hours @$2.00 per hour Actual Costs Total variable cost, $18,000 Total fixed cost, $8,000 10. The amount of the factory overhead controllable variance is a. $3,000 favorable b. $0 c. $2,000 unfavorable d. $3,000 unfavorable The amount of the total factory overhead cost variance is: a. $2,500 unfavorable b. $2,000 favorable c. $0 d. $5,000 unfavorable 11.

Explanation / Answer

Ans. Standard variable cost =(2X3)X2500 = $15000

Actual Variable cost $18000

Factory overhead controllable variance is =$15000-$18000= $3000 (Unfavourable)

11. Calculation of Total Factory overhead variance

Standard variable overhead cost for actual production is $15000

Standard Fixed overhead cost for actual production is (3X.80)X2500 = $6000

Total Standard Factory overhead is (15000+6000) = $21000

Total Actual factory overhead is (18000+8000)= $26000

total factory overhead variance is = $21000-26000 = $5000 (unfavourable)

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