A company has budgeted to make and sell 4,200 units of product X during the period.
The standard fixed overhead cost per unit is $4.
During the period covered by the budget, the actual results were as follows.
Production and sales?????????????????????????? 5,000units
Fixed overhead incurred?????????????????????? $17,500
What are the fixed overhead variances for the period?
Fixed overhead expenditure variance
??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? $
Budgeted fixed overhead expenditure (4,200 units x $4 per unit)???????????? 16,800
Actual fixed overhead expenditure??????????????????????????????????????????????????????????? 17,500
Fixed overhead expenditure variance?????????????????????????????????????????????????????? 700 (A)
The variance is adverse because the actual expenditure was higher than the amount budgeted.
Fixed overhead volume variance
????????????????????????????????????????????????????????????????????????????????????????????????????????????? $
Actual production at standard rate (5,000 x $4 per unit)???????????????????20,000
Budgeted production at standard rate (4,200 x $4 per unit)?????????????16,800
Fixed overhead volume variance????????????????????????????????????????????????????? 3,200(F)
The variance is favourable because the actual volume of output was greater than the budgeted volume of output.
If you selected an incorrect option you misinterpreted the direction of one or both of the variances.
多做幾道
Which of the following statements about management accounting information is/are true?
(i) They must be stated in purely monetary terms.
(ii) Limited companies must, by law, prepare management accounts.
(iii) They serve as a future planning tool and are not used as an historical record.
Which of the following statements is/are correct?
(i) A management control system is a term used to describe the hardware and software used to drive a database system which produces information outputs that are easily assimilated by management.
(ii) An objective is a course of action that an organisation might pursue in order to achieve its strategy.
(iii) Information is data that has been processed into a form meaningful to the recipient.
Good information should have certain qualities. Which of the following are qualities of good information?(i) Complete(ii) Extensive(iii) Relevant(iv) Accurate
Monthly variance reports are an example of which one of the following types of management information?
Which of the following statements is/are correct?
(i) Information for decision-making should incorporate uncertainty in some way
(ii) The data used to prepare financial accounts and management accounts are the
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