Managerial Accounting: E7-17 The data related to Osage Sporting Goods Company’s factory overhead

Managerial Accounting 
E7-17 Factory overhead variance corrections 
The data related to Osage Sporting Goods Company’s factory overhead cost for the production of 60,000 units of product are as follows: 
Actual: 
Variable factory overhead 274,500 
Fixed factory overhead 224,000 
Standard: 76,000 hours at $6.30 ($3.50 for variable factory overhead) 478,800 

Productive capacity at 100% of normal was 80,000 hours, and the factory overhead cost budgeted at the level of 76,000 standard hours was $490,000. Based upon these data, the chief cost accountant prepared the following variance analysis: 
Variable factory overhead controllable variance: 
Actual variable factory overhead cost incurred 274,500 
Budgeted variable factory overhead for 76,000 hours 266,000 
Variance—unfavorable 8,500 
Fixed factory overhead volume variance: 
Normal productive capacity at 100% 80,000 hours 
Standard for amount produced 76,000 
Productive capacity not used 4,000 hours 
Standard variable factory overhead rate × $6.30 
Variance—unfavorable 25,200 
Total factory overhead cost variance—unfavorable $33,700 

Identify the errors in the factory overhead cost variance analysis.
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