Question

Bellingham Company produced 15,000 units of product that required 4 standard direct labor hours per unit. The standard variable overhead cost per unit is $0.90 per direct labor hour. The actual variable factory overhead was $52,770. 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.

Answer 1

Answer: variable factory overhead controllable variance=  -$1,230 which is Favorable.

Explanation:

Variance = Actual factory overhead – Budgeted allowance on standard hours allowed x Fixed expenses budgeted + variable expenses

Variable factory overhead controllable variance=Actual factory overhead-Standard Factory Overhead

But first.

Standard labor overheads cost == Units produced x standard direct labor hours per unit x standard overhead cost per unit per direct labor hour

15,000 x 4 x $0.90= $54,000

 And the given

Actual overhead cost = $52,770

Therefore,

Variable factory overhead controllable variance= Actual factory overhead-

Standard Factory Overhead

= $52,770-$54,000= - $1,230 which is Favorable.

it  favorable because the actual overhead cost is less than the standard overhead cost.

Answer 2

The favorable variable will be calculated by Actual overhead - Budgeted allowances on Standard hour X Fixed expenses + variable expenses in the similar way :

The Controllable of factory overhead is equal to Factory overhead - Standard factory overhead .

Unit produced 15000 X4(Standard direct labor ) X Cost per unit $0.09 = 54000USD.So the Actual Overhead cost will $52770

And the variable favorable cost will be ($1.230) which is less then the standard cost .

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