Ask Question
11 November, 17:36

Levelor Company's flexible budget shows $10,710 of overhead at 75% of capacity, which was the operating level achieved during May. However, the company applied overhead to production during May at a rate of $2.00 per direct labor hour based on a budgeted operating level of 6,120 direct labor hours (90% of capacity). If overhead actually incurred was $11,183 during May, the controllable variance for the month was:

+5
Answers (1)
  1. 11 November, 17:43
    0
    The correct answer is $473 (Unfavorable).

    Explanation:

    According to the scenario, the given data are as follows:

    Actual overhead = $11,183

    Budgeted Overhead = $10,710

    So, we can calculate the controllable variance by using following formula:

    Controllable variance = Actual overhead - Budgeted overhead

    By putting the value, we get

    Controllable variance = $11,183 - $10,710

    = $473 (Positive shows unfavorable)

    = $473 (unfavorable)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Levelor Company's flexible budget shows $10,710 of overhead at 75% of capacity, which was the operating level achieved during May. However, ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers