Question

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 the drop down mennu and compute.

[(Actual Cost, Actual Quantity, Standard Cost, Standard Quantity) - (Actual Cost, Actual Quantity, Standard Cost, Standard Quantity)] x (Actual Cost, Actual Quantity, Standard Cost, Standard Quantity) = VOH Cost Variance

(_____ - _____ ) x _____ = _____ (Favorable/Unfavorable)

14.) Calculate the variable overhead efficiency variance:

[(Actual Cost, Actual Quantity, Standard Cost, Standard Quantity) - (Actual Cost, Actual Quantity, Standard Cost, Standard Quantity)] x (Actual Cost, Actual Quantity, Standard Cost, Standard Quantity) = VOH Efficiency Variance

(_____ - _____) x _____ = _____ (Favorable/Unfavorable)

15.) Calculate the total variable overhead variance:

The total variable overhead variance is: _____ (Favorable/Unfavorable)

16.) Calculate the fixed overhead cost variance:

(Actual Cost, Actual Quantity, Standard Cost, Standard Quantity) - (Actual Cost, Actual Quantity, Standard Cost, Standard Quantity) = Fixed Overhead Cost Variance

______ - ______ = ______ (Favorable/Unfavorable)

17.) Calculate the fixed overhead volume variance

(Actual fixed overhead, Actual variable overhead, Budgeted fixed overhead, Budgeted variable overhead, Standard overhead allocation rate, SQ of the allocation base allowed for AO) x (Actual fixed overhead, Actual variable overhead, Budgeted fixed overhead, Budgeted variable overhead, Standard overhead allocation rate, SQ of the allocation base allowed for AO) = Overhead allocated to production

(______ x _____) = _______

Now select the formula then enter the amounts and compute fixed overhead volume variance and identify whether it is favorable (F) or unfavorable (U).

(Actual fixed overhead, Actual variable overhead, Allocated fixed overhead, Budgeted fixed overhead, Budgeted variable overhead) - (Actual fixed overhead, Actual variable overhead, Allocated fixed overhead, Budgeted fixed overhead, Budgeted variable overhead) = Fixed Overhead Volume Variance

(_____ - _____) = _____ (F/U)

18.) Calculate the total fixed overhead variance:

The total fixed overhead variance is: ____ (F/U)

Answer 1

• All working forms part of the answer
• Actual data and Standard Data for actual 1100 units

Actual DATA for		1100	units
	Quantity (AQ)	Rate (AR)	Actual Cost
Variable Overhead	8340	$                0.50	$             4,170.00
Standard DATA for		1100	units
	Quantity (SQ)	Rate (SR)	Standard Cost
Variable Overhead	8250	$                0.20	$             1,650.00
	Hrs	Rate	Amount
Fixed Overhead Budgeted			$             1,406.00
Standard FO Applied	8340	$                0.15	$             1,251.00
Actual Fixed Overhead incurred	8340		$             1,531.00

• All Variances that have been asked:

Variable Overhead Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                        0.20	-	$                       0.50	)	x	8340
	-2502
	Variance		2502			Unfavourable-U
Variable Overhead Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	8250	-	8340	)	x	$                           0.20
	-18
	Variance		18			Unfavourable-U
Variable Overhead Spending Variance
(	Standard Cost	-	Actual Cost	)
(	$               1,650.00	-	$              4,170.00	)
	-2520
	Variance		2520			Unfavourable-U
Fixed Overhead Spending Variance
(	Actual Fixed Overhead incurred	-	Fixed Overhead Budgeted	)
(	$               1,531.00	-	$              1,406.00	)
	125
	Variance		125			Unfavourable-U
Fixed Overhead Production Volume Variance
(	Fixed Overhead Budgeted	-	Standard FO Applied	)
(	$               1,406.00	-	$              1,251.00	)
	155
	Variance		155			Unfavourable-U