A company has budgeted fixed overhead of $1.00 per hour at expected capacity of 5,000 units which has a standard quantity of 2 hours per unit. The company actually produces 5,200 units and incurred total overhead costs of $12,000. The controllable variance is:

Question

Rene Dunn

Business

16 July, 16:24

A company has budgeted fixed overhead of $1.00 per hour at expected capacity of 5,000 units which has a standard quantity of 2 hours per unit. The company actually produces 5,200 units and incurred total overhead costs of $12,000. The controllable variance is:

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Answers (1)

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Big Mac · Answer 1

Controllable variance = $1,600 unfavorable

Explanation:

Giving the following information:

A company has a budgeted fixed overhead of $1.00 per hour at the expected capacity of 5,000 units which has a standard quantity of 2 hours per unit. The company produces 5,200 units and incurred total overhead costs of $12,000.

Controllable variance = actual overhead - budgeted overhead

Controllable variance = 12,000 - (5,200*2) = $1,600 unfavorable