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irina1246 [14]
3 years ago
12

A company has budgeted fixed overhead of $1.00 per hour at expected capacity of 5,000 units which has a standard quantity of 2 h

ours per unit. The company actually produces 5,200 units and incurred total overhead costs of $12,000. The controllable variance is:__________
Business
1 answer:
Nastasia [14]3 years ago
7 0

Answer:

$1,600 Unfavorable

Explanation:

Given that,

Budgeted fixed overhead = $1.00 per hour

Expected capacity = 5,000 units

Standard quantity = 2 hours per unit

Actual units produced = 5,200

Total overhead costs = $12,000

Controllable variance:

= Actual Overhead cost - Budgeted cost of actual production

= $12,000 - (Actual units produced × Budgeted fixed overhead × Standard quantity)

= $12,000 - (5,200 × $1 × 2)

= $12,000 - $10,400

= $1,600 Unfavorable

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