Question

Bradshaw Company provided the following data: Standard fixed overhead rate (SFOR) $5 per direct labor hour Actual fixed overhead costs $301,680 Standard hours allowed per unit 4 hours Actual production 15,000 units Required:

1. Calculate the standard hours allowed for actual production. hours
2. Calculate the applied fixed overhead. $
3. Calculate the total fixed overhead variance. Enter amount as a positive number. $

Answer 1

1. 60,000 hours

2. $300,000

3. $1,680 Unfavorable

Step-by-step explanation:

1. The computation of the standard hours allowed for actual production is shown below:

= Actual production × Standard hours allowed per unit

= 15,000 units × 4 hours

= 60,000 hours

2. The computation of the applied fixed overhead is shown below:

= Standard hours allowed for actual production × Standard fixed overhead rate

= 6,000 hours × $5

= $300,000

3. The computation of the total fixed overhead variance is shown below:

= Actual fixed overhead costs - Applied fixed overhead

= $301,680 - $300,000

= $1,680 Unfavorable