Question

Bulger Company provided the following data: Standard fixed overhead rate (SFOR) $8 per direct labor hour Actual fixed overhead costs $985,300 Standard hours allowed per unit 6 hours Actual production 20,000 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 the amount as a positive number and select Favorable or Unfavorable. $

Answer 1

1. 120,000 hours

2. $960,000

3. $25,300 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

= 20,000 units × 6 hours

= 120,000 hours

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

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

= 120,000 hours × $8

= $960,000

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

= Actual fixed overhead costs - Applied fixed overhead

= $985,300 - $960,000

= $25,300 Unfavorable