Question

Tucker Company produced 8,600 units of product that required 2.20 standard hours per unit. The standard variable overhead cost per unit is $6.10 per hour. The actual variable factory overhead was $113,100.

Determine the variable factory overhead controllable variance. Enter a favorable variance as a negative number.

Answer 1

Actual variable factory overhead = $113,100

Actual output = 8,600 units

Standard hours per unit = 2.2 hours

Standard variable overhead cost per unit = $6.10 per hour

Budgeted variable factory overhead = Actual output x Standard hours per unit x Standard variable overhead cost per unit

= 8,600 x 2.2 x 6.10

= $115,412

Variable factory overhead controllable variance = Actual variable factory overhead - Budgeted variable factory overhead

= 113,100 - 115,412

= $2,312 (Favorable)

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