Question

Tucker Company produced 7,000 units of product that required 3.2 standard hours per unit. The standard variable overhead cost per unit is $6.40 per hour. The actual variable factory overhead was $140,490. Determine the variable factory overhead controllable variance. Enter a favorable variance as a negative number.

Answer 1

Ans.	Variable overehad controllable variance = Actual variable overhead cost - Standard variable overhead cost
	$140,490 - $143,360
	-$2,870	Favorable
	*CALCULATIONS:
	Standard hours = Actual output * standard hours per unit of output
	7,000 units * 3.2 hours per unit
	22,400 hours
	Standard variable overhead cost = Standard hours * Standard rate
	22,400 * $6.40
	$143,360
	*If the standard cost is higher than the actual it means the variance is favorable.
	*If the standard cost is less than the actual it means the variance is unfavorable.