Question

Branch Company provided the following information: Standard fixed overhead rate (SFOR) per direct labor hour $5.00 Actual fixed overhead $305,000 BFOH $300,000 Actual production in units 16,000 Standard hours allowed for actual units produced (SH) 64,000 Required Enter amounts as positive numbers and select Favorable (F) or Unfavorable(U). 1. Using the columnar approach, calculate the fixed overhead spending and volume variances. (1) (2) (3) Spending Volume 2. Using the formula approach, calculate the fixed overhead spending variance. $ 3. Using the formula approach, calculate the fixed overhead volume variance. $ 4. Calculate the total fixed overhead variance. $

Answer 1

Answer:

1. $5000 unfavorable

2. 3000 hrs favorable

Explanation:

Fixed Overhead spending variance

Budgeted fixed overhead - Actual fixed overhead

$300,000 - $305,000

= $5,000 unfavorable

Fixed Overhead volume variance

Actual volume = actual fixed overhead / Actual fixed overhead per hr

= $305,000 / $5

= 61000 hrs

(Budgeted volume - Actual volume) * budgeted rate

64000 hrs - 61000 hrs

= 3000 hrs favorable