Exercise 23-11 Computation of volume and controllable overhead variances LO P3
World Company expects to operate at 80% of its productive capacity of 57,500 units per month. At this planned level, the company expects to use 25,300 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate based on direct labor hours. At the 80% capacity level, the total budgeted cost includes $70,840 fixed overhead cost and $298,540 variable overhead cost. In the current month, the company incurred $368,000 actual overhead and 22,300 actual labor hours while producing 43,000 units.
(1) Compute the overhead volume variance. (Round all your intermediate calculations to 2 decimal places.)
(2) Compute the overhead controllable variance.
Exercise 23-11 Computation of volume and controllable overhead variances LO P3
| World Company expects to operate at 80% of its productive capacity of 57,500 units per month. At this planned level, the company expects to use 25,300 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate based on direct labor hours. At the 80% capacity level, the total budgeted cost includes $70,840 fixed overhead cost and $298,540 variable overhead cost. In the current month, the company incurred $368,000 actual overhead and 22,300 actual labor hours while producing 43,000 units. |
| (1) | Compute the overhead volume variance. (Round all your intermediate calculations to 2 decimal places.)
|
