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calculating factory overhead the standard capacity of a factory is 8 000 units per m 729527

Calculating factory overhead

The standard capacity of a factory is 8,000 units per month. Cost and production data follow:

Standard application rate for fixed overhead

$0.50 per unit

Standard application rate for variable overhead

$1.50 per unit

Production—Month 1

7,400 units

Production—Month 2

8,200 units

Actual factory overhead—Month 1


Actual factory overhead—Month 2


Calculate the amount of factory overhead allowed for the actual volume of production each month and the variance between budgeted and actual overhead for each month.

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