# Build_a_Spreadsheet_11_21 - -budgeted FOH = \$122,000...

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DATA INPUT Actual output 9,000 cases Actual variable overhead (Actual VOH) \$405,000 Actual fixed overhead (actual FOH) \$122,000 Actual machine time 40,500 machine hours Standard variable-overhead rate \$9.00 per machine hour Standard quantity of machine hours 4 hours per case of marshmallows Budgeted fixed overhead (budgeted FOH) \$120,000 per month Budgeted output 10,000 cases per month SOLUTION 1) Variable-overhead spending variance = actual VOH - (AH x SVR) = \$405,000 - 40,500 x \$9.00 = \$40,500 Unfavorable 2) Variable-overhead efficiency variance = SVR x (AH - SH*) = \$9.00 x 40,500 - 36,000 = \$40,500 Unfavorable 36,000 hrs. = 9,000 cases x 4 hrs per case 3) Fixed-overhead budget variance = actual FOH
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Unformatted text preview: -budgeted FOH = \$122,000 -\$120,000 = \$2,000 Unfavorable 4) Fixed-overhead volume variance = budgeted FOH-= \$120,000 -\$108,000 = \$12,000 (Positive) ** = (predetermined FOH rate) x (standard allowed hours) = 3 x 36,000 = \$108,000 predetermined fixed overhead rate = \$120,000 / 10,000 x 4 = 3 standard allowed hours = 9,000 x 4 = 36,000 hrs. ** Consistent with the discussion in the text, we choose not to interpret the volume variance as either favorable or unfavorable. Some accountants would designate a positive volume variance as "unfavorable" and a negative volume variance as "favorable." * SH = applied fixed overhead ^ ^ applied fixed overhead...
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## This note was uploaded on 02/29/2012 for the course E 101 taught by Professor Sfere during the Spring '12 term at Abilene Christian University.

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