The Standard Factory Overhead Rate Is $12 Per Machine Hour

question 178

Essay

The standard factory overhead rate is $12 per machine hour ($10 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 42,000 machine hours.The standard cost and the actual cost of factory overhead for the production of 2,000 units were as follows: $\begin{array}{lr}\text { Actual: Variable factory overhead } & \$ 350,500 \\\text { Fixed factory overhead } & 84,000 \\\text { Standard: } 35,000 \text { hours } @ \$ 12 & 420,000\end{array}$ ?
Determine the (a) volume variance, (b) controllable variance, and (c) total factory overhead cost variance.

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Definitions:

Self-Compassion

The act of showing compassion and empathy towards oneself during times of suffering or failure, instead of engaging in severe self-judgment.

Inadequate

Lacking the quality or quantity required; insufficient for a purpose.

Self-Serving Bias

The common tendency to attribute successes to personal characteristics and failures to external factors, often to maintain self-esteem.

Actor-Observer Effect

The tendency to make internal attributions for the behavior of others and external attributions for our own behavior.