Question 16.TQ.8 : The following overhead budget has been prepared for Anthea L...

Accounting for Non-Accounting Students

The following overhead budget has been prepared for Anthea Limited:

Actual fixed overhead: £150,000.
Budgeted fixed overhead: £135,000.
Fixed overhead absorption rate per hour: £15.
Actual hours worked: 10,000.
Standard hours of production: 8000.

Required:
Calculate the following fixed production overhead variances:

(a) total
(b) expenditure
(c) volume.

The blue check mark means that this solution has been answered and checked by an expert. This guarantees that the final answer is accurate.
Learn more on how we answer questions.

Overhead variances for Anthea Limited:

(a) Fixed production overhead total variance:	£
Actual fixed overhead	150000
Less: Standard hours of production × fixed production overhead absorption rate = (8000 hrs × £15)	120000
30000		(A)
(b) Fixed production overhead expenditure variance:	£
Actual fixed overhead – budgeted fixed	(150000 -135000)
15000		(A)
(c) Fixed production overhead volume variance:
Budgeted fixed overhead – (standard hours of production × fixed production overhead absorption rate) = [£135000 – (8000 × £15)]	15000	(A)

Related Answered Questions

Question: 16.2

Calculation of efficiency, capacity and production volume ratios The following information relates to the Frost Production Company Limited for the year to 31 March 2016: ...

Verified Answer:

(a) The efficiency ratio:

\frac{Standard h...

Question: 16.4

Calculating sales variances The following data relate to Frozen Limited for the year to 31 July 2016: ...

Verified Answer:

Selling price variance = [actual sales revenue - (...

Question: 16.5

Preparation of a standard cost operating statement Example 16.3 gave some information relating to the Frost Production Company Limited for the year to 31 March 2016. The cost data used in that example will now be used to illustrate the structure of a standard cost operating statement, along with ...

Verified Answer:

Frost Production Company Limited. Standard cost op...

Question: 16.3

Calculation of the main cost variances The following information has been extracted from the records of the Frost Production Company Limited for the year to 31 March 2016: ...

Verified Answer:

(a) In answering part (a) of this question the fir...

Question: 16.TQ.12

Milton Limited has produced the following information: Total actual sales: £99,000. Actual quantity sold: 9000 units. Budgeted selling price per unit: £10. Standard cost per unit: £7. Total budgeted units: 10,000 units. Required: Calculate: (a) the selling price variance (b) the sales volume ...

Verified Answer:

Selling price variance for Milton Ltd: (a) Selling...

Question: 16.TQ.9

Using the data contained in the previous question, calculate the following performance measures: (a) efficiency ratio (b) capacity ratio (c) production volume ratio. ...

Verified Answer:

Performance measures for Anthea Ltd: (a) Efficienc...

Question: 16.TQ.6

The following information relates to Bruce Limited: Actual hours: 1000. Actual wage rate per hour: £6.50. Standard hours for actual production: 900. Standard wage rate per hour: £6.00. Required: Calculate the following variances: (a) direct labour total (b) direct labour rate (c) direct labour ...

Verified Answer:

Variances for Bruce Limited: (a) Direct labour...

Question: 16.TQ.4

You are presented with the following information for X Limited: Standard price per unit: £10. Standard quantity for actual production: 5 units. Actual price per unit: £12. Actual quantity: 6 units. Required: Calculate the following variances: (a) direct material total variance (b) direct material ...

Verified Answer:

Variances for X Limited: (a) Direct material t...