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FUN Inc. has a fully automated production facility...




FUN Inc. has a fully automated production facility in which almost 97 percent of overhead costs are driven by machine hours. As the company?s cost accountant, you have computed the following overhead variances for May: Variable overhead spending variance: $34,000 F Variable overhead efficiency variance:41,200 F Fixed overhead spending variance:28,000 U Fixed overhead volume variance: 20,000 U The company?s president is concerned about the variance amounts and has asked you to show her how the variances were computed and to answer several questions. Bud- geted fixed overhead for the month is $1,000,000; the predetermined variable and fixed overhead rates are, respectively, $20 and $40 per machine hour. Budgeted capacity is 20,000 units.,i have to complete this,Insert your answers in the gray-shaded cells. If an answer is incorrect, the word "wrong" will appear. a. Actual machine hours $448,800 ? = MH Wrong MH budgeted ? = MH MH applied $980,000 ? = MH Wrong Actual VOH VOH Rate x Act. Hrs. Applied VOH x 22,440 x $34,000 Fav. $41,200 Fav. VOH Spending Variance VOH Efficiency Variance Total VOH Variance Actual FOH Budgeted FOH Applied FOH x 25,000 x $28,000 Unfav. $20,000 Unfav. FOH Spending Variance Volume Variance Total FOH Variance b. Standard machine hours per unit: ? = hours c. Actual machine hours worked: ? = d. Total spending variance: - = e. The VOH favorable efficiency variance resulted from using 2,060 fewer machine hours than allowed given production of 20,000 units. The FOH volume variance resulted from underutilizing capacity by 500 machine hours. f. OH Spending Variance VOH Efficiency Variance Volume Variance Cost of Goods Sold


Paper#8118 | Written in 18-Jul-2015

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