Question

Bonehead Co. has the following factory overhead costs for the most recent period: Standard overhead cost...

Bonehead Co. has the following factory overhead costs for the most recent period:

Standard overhead cost applied to this period’s production $ 72,000
Flexible budget for overhead based on output (i.e., units produced) 65,000
Total budgeted overhead in the master (static) budget 86,000
Actual total overhead cost incurred during the period 76,000

Under a two-variance analysis (breakdown) of the total overhead variance for the period, the total overhead flexible-budget (FB) variance, to the nearest whole dollar, is:

Multiple Choice

$4,000 unfavorable.

$10,000 favorable.

$14,000 unfavorable.

$7,000 favorable.

$11,000 unfavorable.

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Answer #1

solution :
given information of bonehead co.
given factory overhead costs for the most recent period are as follows :
Standard overhead applied to this period's production

$72,000

Flexible budget for overhead based on output (i.e. units produced):

$65,000

Total budgeted overhead in the master (static) budget:

$86,000

Actual total overhead cost incurred during the period:

$76,000


caluculation of overhead flexible budget variance :
finding
using Under a two-variance analysis (breakdown) of the total overhead variance for the period
now,
totat overhead flexible budget variance = total overhead cost - flexible budget

=$76000-$65000

=11000 unfavourablle

therefore option d

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