Homework SourseThe following information relates to Gouws Manufacturings ov
The following information relates to Gouws Manufacturing\'s overhead costs for the month:
Static budget variable overhead $14,200
Static budget fixed overhead $5,600
Static budget direct labor hours 1,000 hours
Static budget number of units 5,000 units
Welty allocates manufacturing overhead to production based on standard direct labor hours.
Welty reported the following actual results for last month: actual variable overhead, $ 14,500; actual fixed overhead, $ $5,400; actual production of 4,700 units at 0.22 direct labor hours per unit. The standard direct labor time is 0.20 direct labor hours per unit.
Compute the fixed overhead volume variance.
The following information relates to Gouws Manufacturing\'s overhead costs for the month:
Static budget variable overhead $14,200
Static budget fixed overhead $5,600
Static budget direct labor hours 1,000 hours
Static budget number of units 5,000 units
Welty allocates manufacturing overhead to production based on standard direct labor hours.
Welty reported the following actual results for last month: actual variable overhead, $ 14,500; actual fixed overhead, $ $5,400; actual production of 4,700 units at 0.22 direct labor hours per unit. The standard direct labor time is 0.20 direct labor hours per unit.
Compute the fixed overhead volume variance.
The following information relates to Gouws Manufacturing\'s overhead costs for the month:
Static budget variable overhead $14,200
Static budget fixed overhead $5,600
Static budget direct labor hours 1,000 hours
Static budget number of units 5,000 units
Welty allocates manufacturing overhead to production based on standard direct labor hours.
Welty reported the following actual results for last month: actual variable overhead, $ 14,500; actual fixed overhead, $ $5,400; actual production of 4,700 units at 0.22 direct labor hours per unit. The standard direct labor time is 0.20 direct labor hours per unit.
Compute the fixed overhead volume variance.
The following information relates to Gouws Manufacturing\'s overhead costs for the month:
Static budget variable overhead $14,200
Static budget fixed overhead $5,600
Static budget direct labor hours 1,000 hours
Static budget number of units 5,000 units
Welty allocates manufacturing overhead to production based on standard direct labor hours.
Welty reported the following actual results for last month: actual variable overhead, $ 14,500; actual fixed overhead, $ $5,400; actual production of 4,700 units at 0.22 direct labor hours per unit. The standard direct labor time is 0.20 direct labor hours per unit.
Compute the fixed overhead volume variance.
Solution
Fixed Overhead Volume Variance = Standard Rate per unit * (Budgeted Production – Actual Production)
Standard Fixed Overhead per unit = Budgeted Overhead
Budgeted Production
Standard Fixed Overhead per unit = $5600
5000 units
Standard Fixed Overhead per unit = $ 1.12/ unit
Hence,
Fixed Overhead Volume Variance = $1.12 per unit * (5000 – 4700)
Fixed Overhead Volume Variance =$ 336 (A)
