Calculating factory overhead
The standard capacity of a factory is 8,000 units per month. Cost
and production data follow:
Standard application rate for fixed overhead . . . . . . $0.50 per unit
Standard application rate for variable overhead . . . $1.50 per unit
Production—Month 1 ............................ 7,400 units
Production—Month 2 ............................ 8,200 units
Actual factory overhead—Month 1 . . ............. $15,100
Actual factory overhead—Month 2 . . ............. $17,200
Calculate the amount of factory overhead allowed for the
actual volume of production each month and the variance
between budgeted and actual overhead for each month.