Assignment Gradebook ORION Downloadable eTextbook tice ment TOR Brief Exercise 2

Question

Assignment Gradebook ORION Downloadable eTextbook tice ment TOR Brief Exercise 200 Manufacturing overhead data for the production of Product B by North Bank, Inc. are as follows. overhead incurred for 69,000 actual direct labor hours worked Overhead rate (variable $2.00; fixed $1.00) at normal capacity of 72,000 direct labor hours Standard hours allowed for work done $206,000 $3.00 69,000 Compute the controllable and volume overhead variances. Identify whether the variance is favorable or unfavorable? Overhead Controllable Variances Question Attempts: 0 of 1

Explanation / Answer

Overhead controllable variance = Actual Overhead - Overhead Budgeted

= $206000 - $210000

= $ 4000 U

*Overhead Budgeted = [(69,000 ×$2) + $72,000] = 210000

Overhead volume variance = Fixed Overhead Rate * Normal Capacity Hours = Standard Hours Allowed

= $ 1 * (72000 - 69000)

= $ 3000 U

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