18 - Use this information to answer the question that follow. The standard costs

Question

18 - Use this information to answer the question that follow. The standard costs and actual costs for factory overhead for the manufacture of 2,600 units of actual production are as follows:

The variable factory overhead controllable variance is

a.$2,924 favorable

b.$0

c.$2,339 favorable

d.$2,924 unfavorable

Standard Costs Fixed overhead (based on 10,000 hours) 3 hours per unit @ $0.77 per hour Variable overhead 3 hours per unit @ $1.92 per hour
Actual Costs     Total variable cost, $17,900     Total fixed cost, $7,800

Explanation / Answer

ANSWER

Variable factory overhead controllable variance

= Actual Variable Cost - Standard Variable Cost

= $ 17,900 - (2600 x 3 x $ 1.92)

= $ 17,900 - $ 14,976

= $ 2,924 Unfavorable.

Therefore option "d" is correct.

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