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

Business

Kyle Cortez

27 April, 11:47

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:

+2

Answers (1)

Know the Answer?

Yasmin Dennis · 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