Homework Help Question & Answers

Assume that ExxonMobil uses a standard cost system for each of its refineries. For the Houston refinery, the monthly fix...

Assume that ExxonMobil uses a standard cost system for each of its refineries. For the Houston refinery, the monthly fixed overhead budget is $8,000,000 for a planned output of 5,000,000 barrels. For September, the actual fixed cost was $8,750,000 for 5,100,000 barrels.

Required

a. Determine the fixed overhead budget variance.

b. If fixed overhead is applied on a per-barrel basis, determine the volume variance.

Provide formulas and an explanation.

0 0
Next > < Previous
ReportAnswer #1

Fixed overhead budget variance

= Actual fixed overhead - Budgeted

= 8,750,000 - 8,000,000

= 750,000 Unfavorable

Budgeted overhead rate per barrel = 8,000,000/5,000,000 = 1.60

Budgeted overhead for actual output = 1.60*5,100,000

= 8,160,000

Volume variance = 8,160,000-8,000,000

= 160,000 Favourable

Add Homework Help Answer
Add Answer of:
Assume that ExxonMobil uses a standard cost system for each of its refineries. For the Houston refinery, the monthly fix...
Your Answer: Your Name: What's your source?
Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
More Homework Help Questions Additional questions in this topic.
Need Online Homework Help?
Ask a Question
Get FREE Expert Answers
WITHIN MINUTES
Related Questions