Stephen Bertieri Online teaching and learning re... Calcuator The standard facto

Question

Stephen Bertieri Online teaching and learning re... Calcuator The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fied fa tory overhead) based on 100% of normal capacity of 30,000 dinect labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows tandard:25,000 hours at $10 $250,000 Variable factory overhead Fxed factory overhead 202,500 0,000 Actual: What is the amount of the variable factory overhead controllable varlance? a $2,500 unfavorable b.$10,000 unfavorable $2,500 fevorable d.$10,000 favorable Previous

Explanation / Answer

Answer is A. $ 2500 unfavorable The explanation is as follows: Std variable overhead rate per hour   $ 8 per hour (Given) Std hours allowed for actual ouput 25,000 hours (Given) Std variable overhead cost allowed for actual ouput ( 25000 hours@8) $200,000 Actual Variabvle overheads $ 202,500 Variable overhead control variance = Std variable overheads Allowed - Actual variable overheads 200,000 -202,500 = $ 2,500 Unfavorable

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