Question

Jordan Industries produced 6,000 units of product that required 1.5 standard hours per unit. The standard variable overhead cost per unit is $2.75 per hour. The actual variable factory overhead was $29,000. Determine the variable factory overhead controllable variance.

a. $4,250 favorable
b. $4,250 unfavorable
c. $20,000 favorable
d. $20,000 unfavorable

Answer 1

b. $4,250 unfavorable

Step-by-step explanation:

The computation of the variable factory overhead controllable variance is shown below:

= Actual variable factory overhead - standard variable factory overhead

where,

Standard variable factory overhead equals to

= 6,000 units × 1.5 standard hours per unit × $2.75 per hour

= $24,750

And, the other items values would remain the same

Now put these values to the above formula

So, the value would be equal to

= $29,000 - $24,750

= $4,250 unfavorable