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Standard Actual Variable overhead rate $3.35 Fixed overhead rate $1.80 Hours 18,900 17,955* Fixed overhead $46,000 Actual variable overhead $67,430 Total factory overhead $101,450 *Actual hours are equal to standard hours for units produced. The total factory overhead cost variance is a.$4,866.75 unfavorable b.$8,981.75 favorable c.$4,866.75 favorable d.$8,981.75 unfavorable

Respuesta :

Answer:

d.$8,981.75 unfavorable

Explanation:

The computation of the total factory overhead cost variance is shown below:

As we know that

Total Factory overhead cost variance = fixed overhead cost variance + variable overhead cost variance

where,

Fixed overhead cost variance is = Standard fixed overhead - actual fixed overhead

Standard fixed overhead = $1.8 hours ×  17,955 hours = $32,319

And, the actual fixed overhead = $101,450 - $67,430= $34,020

So, the Variance is  1,701 unfavorable

And,

For variable overhead cost variance,  it is

 = Standard variable overhead - actual variable overhead

The standard variable overhead is = $3.35 × 17,955 hours = $60,149.25

And,

Actual variable overhead = $67,430

So,

Variance = 7,280.75 unfavorable

Therefore,

The total factory overhead cost variance is

= $1,701 + $7,280.75

= $8,981.75 unfavorable

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