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6 January, 07:47

Jordan Industries produced 6,000 units of product that required 1.5 standard hours per unit. The standard variable overhead cost per unit is $2.75 per hour. The actual variable factory overhead was $29,000. Determine the variable factory overhead controllable variance.

a. $4,250 favorable

b. $4,250 unfavorable

c. $20,000 favorable

d. $20,000 unfavorable

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  1. 6 January, 07:55
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    b. $4,250 unfavorable

    Explanation:

    The computation of the variable factory overhead controllable variance is shown below:

    = Actual variable factory overhead - standard variable factory overhead

    where,

    Standard variable factory overhead equals to

    = 6,000 units * 1.5 standard hours per unit * $2.75 per hour

    = $24,750

    And, the other items values would remain the same

    Now put these values to the above formula

    So, the value would be equal to

    = $29,000 - $24,750

    = $4,250 unfavorable
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