Posted: December 28th, 2015

Analyse the variance into capacity and expenditure variances for fixed overhead, and into efficiency and expenditure variances for variable overhead

The manufacturing overhead budget for a company for 20X1 was as follows: Fixed overhead:   $72,000 Variable overhead:   $3 per direct labour hour Budgeted direct labour hours: 15,000 The actual fixed overhead incurred was $76,000 and the variable overhead amounted to $42,600. The actual direct labour hours for the year were 16,000. a. Calculate the total recovered fixed overhead and any under/over recovery. b. Analyse the variance into capacity and expenditure variances for fixed overhead, and into efficiency and expenditure variances for variable overhea