B&B Electric Corporation: Two-variance overhead analysis
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B&B Electric Corporation:
Standard cost:
Materials (2lb x $ per lb)...................................$10.00
Labor (4 hr x $6 per hr)....................................$24.00
Factory overhead (4 hr x #3.38* per hr............$13.52
total standard cost...........................................$47.52
* $1.00 variable + $2.38 fixed = $3.38
Factory overhead rates are based on a normal 70% capacity and used the following flexible budget:
at 70% capacity
motors.............2,100
variable OH....$8,400
fixed OH.......$20,000
Actual production was 2,500 motors and factory overhead costs totaled $29,750.
Compute the factory overhead using the two-variance method (controllable variance & volume variance).
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B&B Electric Corporation:
Standard cost:
Materials (2lb x $ per lb)...................................$10.00
Labor (4 hr x $6 per hr)....................................$24.00
Factory overhead (4 hr x #3.38* ...
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