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Patton Corp. uses a standard cost system to account for the costs of its one products. Budgeted fixed overhead is $172,000, budgeted production is 4,000 per month, and practical capacity is 5,000 units. During November, Patton produced 3,900 units. Fixed overhead incurred totaled $165,420.

Assume Patton calculates its fixed overhead rate based on budgeted production.

a. What is the expected (planned) capacity variance?

b. What is the unexpected (unplanned) capacity variance?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92793908

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