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two variance overhead analysis the standard specifications for an electric motor man 729538

Two variance overhead analysis

The standard specifications for an electric motor manufactured by B&B Electric Corporation follow:

Standard cost per unit:

 

Materials (2 lb $5 per lb)

$10.00

Labor (4 hr $6 per hr)

24.00

Factory overhead (4 hr $338* per hr)

13.52

Total standard cost

$47.52

1.00 variable þ $2.38 fixed ¼ $3.38

Factory overhead rates are based on a normal 70% capacity and use the following flexible budget:

Normal

 

70%

85%

100%

Motors to be produced

2,100

2,550

3,000

Variable overhead

$8,400

$10,200

$12,000

Fixed overhead

$20,000

$20,000

$20,000

The actual production was 2,500 motors, and factory overhead costs totaled $29,750.

Required:

Calculate the factory overhead variances using the two variance method.

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