The following are extracts from the records of a cost centre within your business:
Extract 1 | Cost Centre A March |
Budgeted variable overhead for the year | $2,400 |
Budgeted output for the year | 24,000 units |
Actual production for March | 1,800 units |
Actual variable overhead for March | $200 |
Extract 2 | Cost Centre B April |
Budgeted fixed overhead | $500 |
Budgeted output | 2,000 units |
Standard time per unit | 15 minutes |
Actual hours worked | 480 |
Actual output | 1,800 units |
Actual fixed overhead | $530 |
Required:
(i) Calculate from the extracts the following variances:
(a) Variable Overhead Expenditure
(b) Fixed Overhead Expenditure
(c) Fixed Overhead Volume
(d) Total Overhead (16 marks)
(ii) Comment upon the volume variance explaining how this may have arisen and illustrating with suitable figures any sub-divisions. (4 marks)
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FCCA,CA(MIA)with more than 26 years of post-qualifying working experiences. Previous working stints with one of the big accounting four,Regional GFC & Group Treasurer in a group of Malaysian and Group CFO in Singapore public listed concern.Also author to another very popular free educational accounting cum finance blog:http://basiccollegeaccounting.com under the branding of College Accounting Coach.
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