Question

Bay Company had actual production of 220 units in the month of April. Budgeted standard fixed...

Bay Company had actual production of 220 units in the month of April. Budgeted standard fixed overhead costs were $20,000, based on normal capacity of 800 direct labor hours per month. The time standard was 4 direct labor hours per unit. The fixed overhead volume variance for April was

a.

$3,600 F
b.

$3,600 U
c.

$2,000 F
d.

$2,000 U
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Budgeted standard fixed overhead cost = $20000

Standard direct labor hours = 800

Standard direct labor hours per unit = 4

Budgeted standard units for the month of April =

Standard direct labor hours / Standard direct labor hours per unit

= 800 / 4 = 200 units

Fixed overhead application rate = Budgeted standard fixed overhead cost/Budgeted standard units

= $20000/200 = $100 per unit

Actual production = 220 units

Fixed overhead volume variance = (Actual units - Standard units) x Fixed overhead application rate

= (220 - 200) x $100

= 20 x $100 = $2000 Favorable

Answer is c. $2,000 F

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1) Determining Budgeted Overhead The overhead application rate for a company is $12 per unit, made...
1) Determining Budgeted Overhead The overhead application rate for a company is $12 per unit, made up of $7 per unit of fixed overhead and $5 per unit of variable over- head. Normal capacity is 10,000 units. In one month, there was a favorable flexible budget variance of $2,500. Actual overhead for the month was $110,000 and actual units produced were 15,125. Based on this information, determine the amount of the budgeted overhead for the actual level of production. 2)...
Smithson Company manufactures shirts. During June, Smithson made 1,100 shirts but had budgeted production at 1,250...
Smithson Company manufactures shirts. During June, Smithson made 1,100 shirts but had budgeted production at 1,250 shirts. Smithson gathered the following additional data: Variable overhead cost standard: $0.20 per DLHr Direct labor efficiency standard: 7.50 DLHr per shirt Actual amount of direct labor hours: 8,340 DLHr Actual cost of variable overhead: $4,170 Fixed overhead cost standard: $0.15 per DLHr Budgeted fixed overhead: $1,406 Actual cost of fixed overhead: $1,531 13.) Calculate the variable overhead cost variance. Select the formula from...
In March, Leona Company made 4,500 units of its product. Leona uses a standard cost system...
In March, Leona Company made 4,500 units of its product. Leona uses a standard cost system and applies overhead cost based on direct labor hours.   Standard: DLH per unit 2.50 Variable overhead per DLH $1.75 Fixed overhead per DLH $3.10 Budgeted variable overhead $21,875 Budgeted fixed overhead $38,750 Actual: Direct labor hours 10,000 Variable overhead $26,250 Fixed overhead $38,000 Refer to Leona Company. Using the four-variance approach, what is the fixed overhead volume variance? a. $3,875.00 U b. $3,875.00 F...
Sharp Company manufacturers jeans. In June, Sharp made 1200 pairs of jeans, but had budgeted production...
Sharp Company manufacturers jeans. In June, Sharp made 1200 pairs of jeans, but had budgeted production at 1400 pairs of jeans. The allocation base for overhead costs is direct labor hours. The following additional data is available for the month: Variable overhead cost standard $0.60 per DLHr Direct labor efficiency standard 2.00 DLHr per jean Actual amount of direct labor hours 2520 DLHr Actual cost of variable overhead $1512 Fixed overhead cost standard $0.25 per DLHr Budgeted fixed overhead $700...
Direct Materials, Direct Labor, and Reports budgeted and actual costs for variable and fixed factory overhead...
Direct Materials, Direct Labor, and Reports budgeted and actual costs for variable and fixed factory overhead along with the related controllable and volume variances.Factory Overhead Cost Variance Analysis Mackinaw Inc. processes a base chemical into plastic. A detailed estimate of what a product should cost.Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 6,800 units of product were as follows: Standard Costs Actual Costs Direct materials 8,800 lb. at $4.90 8,700...
Acme Company’s production budget for August is 17,900 units and includes the following component unit costs:...
Acme Company’s production budget for August is 17,900 units and includes the following component unit costs: direct materials, $8.0; direct labor, $10.4; variable overhead, $6. Budgeted fixed overhead is $36,000. Actual production in August was 18,135 units. Actual unit component costs incurred during August include direct materials, $8.60; direct labor, $9.80; variable overhead, $7.20. Actual fixed overhead was $37,900. The standard fixed overhead application rate per unit consists of $2.4 per machine hour and each unit is allowed a standard...
Blumen Textiles Corporation began April with a budget for 47,000 hours of production in the Weaving...
Blumen Textiles Corporation began April with a budget for 47,000 hours of production in the Weaving Department. The department has a full capacity of 63,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the beginning of April was as follows: Variable overhead $122,200 Fixed overhead 88,200 Total $210,400 The actual factory overhead was $212,900 for April. The actual fixed factory overhead was as budgeted. During April, the Weaving Department had standard hours at actual production...
Lihue, Inc., applies fixed overhead at the rate of $4.20 per unit. Budgeted fixed overhead was...
Lihue, Inc., applies fixed overhead at the rate of $4.20 per unit. Budgeted fixed overhead was $1,457,820. This month 342,100 units were produced, and actual overhead was $1,450,000. Required A What are the fixed overhead price and production volume variances for Lihue? (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Fixed overhead price variance    Fixed overhead production volume variance Required B: What...
Assume that $102,000 is budgeted for fixed overhead. $95,000 was actually spent on fixed overhead. Fixed...
Assume that $102,000 is budgeted for fixed overhead. $95,000 was actually spent on fixed overhead. Fixed overhead is applied to production at $10 per labor hour, and the achieved output was 5,000 units. The standard labor hours are 2 hours per unit. The total fixed overhead variance is $2,000 favorable. All of these choices are correct. The fixed overhead spending variance is $7,000 favorable. The fixed overhead volume variance is $5,000 unfavorable.
Neptune Inc. uses a standard cost system and has the following information for the most recent...
Neptune Inc. uses a standard cost system and has the following information for the most recent month, April: Actual direct labor hours (DLHs) worked 17,000 Standard DLHs allowed for good output produced this period 18,000 Actual total factory overhead costs incurred $ 45,400 Budgeted fixed factory overhead costs $ 10,800 Denominator activity level, in direct labor hours (DLHs) 15,000 Total factory overhead application rate per standard DLH $ 2.70 The fixed overhead production volume variance in April for Neptune, Inc.,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT