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# B&B Electric Corporation: Two-variance overhead analysis

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).

#### Solution Preview

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* ...

#### Solution Summary

Your tutorial is attached in Excel. Click in cells to see how each amount was figured.

\$2.19