Question

Factory Overhead Controllable Variance

Bellingham Company produced 3,700 units of product that required 1.5 standard hours per unit. The standard variable overhead cost per unit is $5.00 per hour. The actual variable factory overhead was $28,420. 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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Answer 1

Ans.	Variable overehad controllable variance = Actual variable overhead cost - Standard variable overhead cost
	$28,420 - $27,750
	$670	(or   $670 unfavorable)
	*CALCULATIONS:
	Standard hours = Actual output * standard hours per unit of output
	3,700 units * 1.5 hours per unit
	5,550 hours
	Standard variable overhead cost = Standard hours * Standard rate
	5,550 * $5.00
	$27,750
	*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.