Question

In October, Glazier Inc. reports 42,000 actual direct labor hours, and it incurs $194,000 of manufacturing overhead costs. Standard hours allowed for the work done is 40,000 hours. The flexible manufacturing overhead budget shows that budgeted costs are $3.80 variable per direct labor hour and $60,000 fixed. Compute the manufacturing overhead controllable variance. Identify whether the variance is favorable or unfavorable?

Answer 1

$18,000 F

Step-by-step explanation:

Actual overhead– Overhead Budgeted=

Overhead Controllable Variance

Actual overhead=$194,000

Overhead Budgeted=$212,000

$194,000–$212,000

=$18,000 F

(40,000 ×$3.80) + $60,000

=$152,000+$60,000

= $212,000

Therefore the manufacturing overhead controllable variance is $18,000 F