fixed overhead variances In enhancement to the info for Acme agency in Mini-Exercises 15.1 and 15.2, the standard fixed overhead application rate per unit consists of $2 per machine hour and each unit is enabled a typical of 1 hour of an equipment time.
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Calculate the solved overhead budget variance and also the resolved overhead volume variance.
Refer come Mini-Exercises 15.1
Flexible budget plan Acme that company production budget for august is 17,500 units and also includes the following component unit costs: straight materials, $8; direct labor, $10; change overhead, $6. Budgeted fixed overhead is $32,000. Actual manufacturing in August was 18,000 units.
Prepare a flexible spending plan that would be used to compare versus actual production expenses for August.
Refer to Mini-Exercises 15.2
Flexible budget and performance report In enhancement to the details for Acme agency in Mini-Exercise 15.1, actual unit component costs incurred during August include straight materials, $8.25; direct labor, $9.45; change overhead, $6.82. Actual resolved overhead was $33,500.
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Prepare a performance report, consisting of each cost component, utilizing the complying with headings:
Fixed overhead spending plan variance:
Fixed overhead budget plan variance is the difference in between the actual resolved overhead incurred and the budgeted solved overhead. If the budgeted solved overhead is more than the actual addressed overhead incurred, climate the variance is favorable variance and also if, the budgeted fixed overhead is less than the actual fixed overhead incurred, then the variance will certainly be unfavorable variance.
Fixed overhead volume variance:
Fixed overhead volume variance is the difference in between the budgeted resolved overhead and the actual solved overhead calculation in regards to predetermined fixed overhead rate. If the actual solved overhead calculation is more than the budgeted addressed overhead, then it is favorable variance. If the actual resolved overhead calculate is much less than the budgeted fixed overhead, climate it is unfavorable variance.