The Penny Worth Supply Company produces cleaning equipment for professional clea

ID: 2577855 • Letter: T

Question

The Penny Worth Supply Company produces cleaning equipment for professional cleaners. At the start of the year, Penny Worth estimated variable overhead costs to be $13 per unit and total fixed overhead costs at $286,280, based on a volume of 60,120 units. The detail for the overhead estimates follows:

Actual costs for the year are as follows:

Calculate the controllable overhead variances for variable and fixed overhead. (Enter all variances as a positive number.)

Variable Overhead Indirect material ($8) 480,9 Utilities ($2) Maintenance ($3) Total variable overhead $781,560 Fixed Overhead Supervisor salaries Depreciation Other fixed overhead Total fixed overhead $ 286,280 Total overhead costs $1,067,840 120,240 180,360 $ 114,150 145,700 26,430

Explanation / Answer

Indirect material

$433,660

$434,400

(54300×$8)

$740 F

Utilities

$104,360

$108,600

(54300×$2)

$4,240 F

Maintenance

$171,400

$162,900

(543000×4)

$8,500 U

Total fixed overhead

Total overhead costs

$280,483

$989,903

$286,280

$992,180

$5,797 F

$2,277 F

Variable overhead actual flexible budgwt variance