Estimate fixed overhead variances, Cost Accounting

Assignment Help:

Estimate Fixed Overhead Variances

271_Estimate Fixed Overhead Variances.png

Referring to data, we can estimate the fixed overhead variances as given below:

Budget for December 2003;

Shs.

Fixed Overheads

11,480

Variable Overheads

13,120

Labour Hours

3,280 hours

Standard Hours of Production

3,280 hours

Actual Results for December 2003

Shs.

Fixed Overheads

12,100

Variable Overheads

13,930

Actual Labour Hours

3,150/hours

Standard Hours of Production

3,280 hours

Fixed Overhead Expenditure Variance is:

=  Actual Fixed Overheads - Budgeted Fixed Overheads

= Shs.12,100 - Shs.11,480 = Shs.620  (Unfavourable)

Fixed Overhead Capacity Variance is:

= Budgeted fixed Overheads - (Actual Hours x F.O. A. R)

=  Shs.11,480 - (3,150 x 3.5) = Shs.455 Unfavourable

Fixed Overhead Efficiency Variance is:

=  (Actual Hours x F.O.A.R) - (Standard Production Hours x F.O.A.R)

= (3,150 X 3.5) - #,230 X 3.5) = Shs.280 Favourable.

Fixed Overhead Volume Variance is:

= Fixed Overhead Capacity Variance + Fixed Overhead Efficiency Variance.

= 455 (U) + 280 (F) = Shs.175 (Unfavourable)

Fixed Overhead Variance is:

= Fixed Overhead Expenditure Variance + Fixed Overhead Volume Variance

= Shs.620 (Unfavourable) + Shs.175 (Unfavourable)

= Shs.795 (Unfavourable).

The approach described so long is the most generally used especially for examination.  Another cause that the student must be confident enough along with so long for further insights the student could proceed to the given section.


Related Discussions:- Estimate fixed overhead variances

Cvp and computer applications, CVP and Computer Applications The broad...

CVP and Computer Applications The broad availability of personal computers encourages more managers to apply cost volume profit analysis. Computers can quickly create the comp

Explain the respective roles of the securities, Explain the respective role...

Explain the respective roles of the Securities and Exchange Commission (SEC) and the Internal Revenue Service (IRS) in the setting of accounting standards?

Maginal costing.., fixed expenses are incurred equally in the two half year...

fixed expenses are incurred equally in the two half year periods,calculate

Evaluate equivalent annual cost, An industrial drill costs $60.000 to purch...

An industrial drill costs $60.000 to purchase and $10,000 to install seven years ago. The market value now is $33.000 and this will decline by 12% of current value each year for th

Closing a factory , i have a factory and 87 employees . we have a closure p...

i have a factory and 87 employees . we have a closure plan in 12 months. what would be the charges?

Prepare a balance sheet for schubert products inc, Balance Sheet Preparatio...

Balance Sheet Preparation with a Missing Element The following data are available for Schubert Products Inc. as of December 31, 2012. Cash . . . . . . . . . . . . . . . . . . .

Determine controllable margin and total contribution, Phelps Glass Inc. has...

Phelps Glass Inc. has reported the following financial data: net revenues of $10 million, variable costs of $5 million, controllable, fixed costs of $2 million, non-controllable fi

Quantitative and qualitative information - cost accounting, Quantitative an...

Quantitative and Qualitative Information in Accounting Systems The availability of information is the lifeblood of any type of management and cost accounting system. It is vi

Prepare the appropriate entries for december 31, A corporation acquired a t...

A corporation acquired a truck on July 1, 2012, at a cost of $162,000. The truck has a six-year useful life and an estimated salvage value of $18,000. The straight-line method of d

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd