Question

Factory Overhead Controllable Variance

Tip Top Corp. produced 2,500 units of product that required 6 standard hours per unit. The standard variable overhead cost per unit is $2.4 per hour. The actual variable factory overhead was $36,830. Determine the variable factory overhead controllable variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
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Factory Overhead Volume Variance

Tip Top Corp. produced 3,500 units of product that required 1.5 standard hours per unit. The standard fixed overhead cost per unit is $0.73 per hour at 5,750 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
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Answer 1

a) variable factory overhead controllable variance =Actual Factory overhead -standard factory overhead cost for actual output

    = 36830 -36000

    = 830 U

working:

-standard factory overhead cost for actual output = Actual output* standard hours per unit *standard variable overhead cost per hour

        = 2500*6*2.4

       = 36000

B) fixed factory overhead volume variance = Budgeted fixed overhead - Standard fixed overhead allowed for actual output

              = 4197.5 - 3832.5

              = 365 U

working:

Budgeted fixed overhead = .73*5750 =4197.50

Standard fixed overhead allowed for actual output=Actual output* standard hours per unit *standard fixed overhead cost per hour

       = 3500*1.5*.73

        = 3832.50