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23 Dec
2019

Compute the overhead controllable variance | Good Grade Guarantee!

World Company expects to operate at 80 % of its productive capacity of 56,250 units per month. At this planned level, the company expects to use 27,900 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.620 direct labor hours per unit. At the 80 % capacity level, the total budgeted cost includes $64,170 fixed overhead cost and $315,270 variable overhead cost In the current month, the company incurred $340,000 actual overhead and 24,900 actual labor hours while producing 38,000 units. (1) Compute the overhead volume variance. (2) Compute the overhead controllable variance. Required 1 Required 2 Compute the overhead volume variance. Classify as favorable or unfavorable. (Ro places.) Fixed Overhead Applied 2.30 Fxed OH per DL hr Standard DL hours 23,560 Foced Overhead applied 54,188 Volume Variance Total foxed overhead applied Total budgeted foced OH 54.188 64,170 9,982 Unfavorable Volume variance Required 1 Required 2 Compute the overhead controllable variance. Classify as favorable or unfavorable. S 340,000 Total actual overhead Flexible budget overhead 64,170 Fxed Variable Total 64,170 9,602 Unfavorable Overhead controllable variance

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