Problem 7-53 Name:
Insert your answers in the gray-shaded cells in columns B, D, F, H, and J. If
an answer is incorrect, the word “wrong” will appear.
a. Actual cost 33.05$
Expected cost (24.00)
Cost difference 9.05$
b. Variable Overhead:
Actual
8$ x 6,000 8$ x 5,700
48,165$
165$ Unfav. 2,400$ Unfav.
VOH Spending Variance VOH Efficiency Variance
Fixed Overhead:
Actual
16$ x 9,000 16$ x 5,700
140,220$
3,780$ Fav. 52,800$ Unfav.
FOH Spending Variance Volume Variance
c.
The $52,800 unfavorable volume variance exists because the company based
its standard fixed overhead rate on an expected capacity of 9,000 units (and,
thus, 9,000 direct labor hours). When only 5,700 units (a standard of 5,700
DLHs) were produced during August, the company was unable to apply $16 of
FOH on 3,300 units (or hours)…amounting to the $52,800 U volume variance.
$144,000
$48,000
$91,200
Solution
Applied
Applied
Budgeted
Budget
$45,600