Question 13 When fixed overhead spending variance is unfavorable, it can be safely assumed that Ofixed overhead allocated for actual output is lower than actual costs incurred Oflexible budget amount is lower than actual costs incurred Ofixed overhead allocated for actual output is higher than actual costs incurred Oflexible budget amount is higher than actual costs incurred 7.5 pts
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A fixed overhead spending variance is the difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs. An unfavorable variance means that the actual costs exceeded the budgeted costs. Show more…
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Required information Overhead variances are due to differences between the actual overhead costs incurred and the overhead applied to production. The overhead controllable variance equals the actual overhead minus the budgeted overhead. The volume variance equals the budgeted fixed overhead minus the applied fixed overhead. B-Max Company Overhead Variance Report For the Month Ended June Volume Variance Expected: 500 units at 80% Capacity Actual: 400 units at 64% Capacity Volume Variance: $600 Unfavorable Controllable Variance | Flexible Budget | Actual Results | Variances Variable costs Indirect materials | $2,000 | $2,200 | $200 U Indirect labor | 1,200 | 1,175 | 25 F Utilities | 1,600 | 1,650 | 50 U Total variable costs | 4,800 | 5,025 | 225 U Fixed costs Depreciation - machinery | 2,000 | 2,000 | 0 Building rent | 1,000 | 1,000 | 0 Total fixed costs | 3,000 | 3,000 | 0 Total factory overhead | $7,800 | $8,025 | $225 U Knowledge Check 01 An overhead variance report includes: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) ? Variable and fixed flexible budget costs ? Variable and fixed actual results ? Variable and fixed sales results
Akash M.
If actual fixed overhead was ÂŁ120,000 and there was a ÂŁ2,600 favorable spending variance and a ÂŁ2,000 unfavorable volume variance, budgeted fixed overhead must have been Group of answer choices ÂŁ120,000. ÂŁ124,600. ÂŁ122,600. ÂŁ122,000.
Narayan H.
You brought your work home one evening and your nephew spilled his chocolate milkshake on the variance report you were preparing. Fortunately, knowing that overhead was applied based on machine hours, you were able to reconstruct the obliterated information from the remaining data. Fill in the missing numbers below: (Round your per machine hour and per unit answers to two decimal places. Indicate the effect of the variance by selecting "Positive" or "Negative". Select "None" and enter "0" for no effect (i.e., zero variance)): Standard machine hours per unit of output: 10.00 Standard variable-overhead rate per machine hour: $24.975 Actual variable-overhead rate per machine hour: $18.500 Actual machine hours per unit of output: 68.600 Budgeted fixed overhead: $50,000 Actual fixed overhead: $15,000 Budgeted production in units: 598,575 Actual production units: 564,300 Variable-overhead spending variance: Unfavorable Variable-overhead efficiency variance: Favorable Fixed-overhead budget variance: Unfavorable Fixed-overhead volume variance: Positive Total actual overhead hours: 598,575 Total budgeted overhead (flexible budget): $564,300 Total budgeted overhead (static budget): $564,300 Total applied overhead: $564,300
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