Copa Corporation\'s accountant left for a vacation before completing the monthly
ID: 2462751 • Letter: C
Question
Copa Corporation's accountant left for a vacation before completing the monthly cost variance report. The corporation's president has asked you to complete the report. The following data are available (capacities are expressed in machine hours.)
Actual machine hours
17,100
Standard machine hours allowed
17,500
Actual variable overhead
(a)
Standard variable overhead rate
$2.50
Variable overhead spending variance
750 (f)
Variable overhead efficiency variance
(b)
Actual fixed overhead
(c)
Budgeted fixed overhead
$153,000
Fixed overhead budget variance
$1,300 (u)
Fixed overhead volume variance
$4,500 (f)
Normal capacity in machine hours
(d)
Standard fixed overhead rate
(e)
Fixed overhead supplied
(f)
Variable overhead efficiency variance: $1,000 (f)
Normal capacity in machine hours 17,000 hours
Fixed overhead applied $157,500
Required:
Analyze the data and fill in the missing amounts. {Hint: Using the structure of Exhibits 6 and 7 to guide you analysis. Solve for (f) before solving for (c) and (d)}
Also need to solve the top part of the attached spreadsheet-don't know how to attach spreadsheet so if you can help I can send it.
Actual machine hours
17,100
Standard machine hours allowed
17,500
Actual variable overhead
(a)
Standard variable overhead rate
$2.50
Variable overhead spending variance
750 (f)
Variable overhead efficiency variance
(b)
Actual fixed overhead
(c)
Budgeted fixed overhead
$153,000
Fixed overhead budget variance
$1,300 (u)
Fixed overhead volume variance
$4,500 (f)
Normal capacity in machine hours
(d)
Standard fixed overhead rate
(e)
Fixed overhead supplied
(f)
Explanation / Answer
(a)Actual hours worked x (Actual overhead rate - standard overhead rate)
= Variable overhead spending variance
750= 17100*(actual overhead rate -2.5)
so actual overhead rate = 2.54
(b)
= Standard overhead rate x (Actual hours - standard hours)
= Variable overhead efficiency variance
=2.5*(17100-17500)= 1000 (f)
(c) Actual fixed overhead - Budgeted fixed overhead = Fixed overhead spending variance
actual fixed o/h-153000=-1300
actual fixed o/h =140000