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How do you calcuate the Fixed Overhead (FOH) spending variance and the Fixed Overhead (FOH) production...

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Question

Accounting

How do you calcuate the Fixed Overhead (FOH) spending varianceand the Fixed Overhead (FOH) production volume variance given thefollowing information:

(budgeted assembly time is 2 hrs per unit of output)

Actual ResultsStatic Budget
Number of fans assembled $ sold220 fans150 fans
Hours of assembley time396 hours        -
Variable Overhead (VOH) cost per hr of assembly time          -$ 31.00
VOH costs$ 12,693          -
FOH cost$ 15,510$ 14,100

Answer & Explanation Solved by verified expert
3.7 Ratings (396 Votes)

  • All working forms part of the answer
  • Working

Hrs

Rate

Amount

Budgeted Fixed Overhead

300 [150 fans x 2 hours per unit]

$              47.00

$           14,100.00

Standard Fixed Overhead or Fixed Overhead absorbed

440 [ 220 fans x 2 hours per unit]

$              47.00

$           20,680.00

Actual Fixed Overhead incurred

396

39.16666667

$           15,510.00

  • Answers

Fixed Overhead (FOH) Spending Variance

(

Standard Fixed Overhead or Fixed Overhead absorbed

-

Actual Fixed Overhead incurred

)

(

$             20,680.00

-

$            15,510.00

)

5170

Variance

$              5,170.00

Favourable-F

Fixed Overhead (FOH) Production Volume Variance

(

Standard Fixed Overhead or Fixed Overhead absorbed

-

Budgeted Fixed Overhead

)

(

$             20,680.00

-

$            14,100.00

)

6580

Variance

6580

Favourable-F

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