The following information relates to manufacturing overhead for the Chapman Company:
Standards:
Total fixed factory overhead - $450,000
Estimated production - 25,000 units (100% of normal capacity)
Overhead rates are based on machine hours
Standard hours allowed per unit produced - 2
Fixed overhead rate - $9.00 per machine hour
Variable overhead rate - $3.50 per hour
Actual: Fixed factory overhead - $450,000
Production - 24,000 units
Variable overhead - $170,000
Compute:
(a) the fixed factory overhead volume variance
(b) the variable factory overhead controllable variance
(c) the total factory overhead cost variance.

Question

The following information relates to manufacturing overhead for the Chapman Company: 
Standards: 
Total fixed factory overhead - $450,000 
Estimated production - 25,000 units (100% of normal capacity) 
Overhead rates are based on machine hours 
Standard hours allowed per unit produced - 2 
Fixed overhead rate - $9.00 per machine hour 
Variable overhead rate - $3.50 per hour 
Actual: Fixed factory overhead - $450,000 
Production - 24,000 units 
Variable overhead - $170,000 
Compute: 
(a) the fixed factory overhead volume variance
(b) the variable factory overhead controllable variance
(c) the total factory overhead cost variance.

Quizplus · Accepted Answer

The Answer of The following information relates to manufacturing overhead for the Chapman Company: 
Standards: 
Total fixed factory overhead - $450,000 
Estimated production - 25,000 units (100% of normal capacity) 
Overhead rates are based on machine hours 
Standard hours allowed per unit produced - 2 
Fixed overhead rate - $9.00 per machine hour 
Variable overhead rate - $3.50 per hour 
Actual: Fixed factory overhead - $450,000 
Production - 24,000 units 
Variable overhead - $170,000 
Compute: 
(a) the fixed factory overhead volume variance
(b) the variable factory overhead controllable variance
(c) the total factory overhead cost variance.

The Following Information Relates to Manufacturing Overhead for the Chapman