PE 23-3B factory overhead controllable variance

Dvorak Company produced 1,000 units of product that required three standard hours per unit. The standard variable overhead cost per unit is $1.40 per hour. The actual variable factory overhead was $4,000. Determine the variable factory overhead controllable variance.

Answer:


Variable Factory Overhead 
Controllable Variance  = 

Variable Factory Overhead 
$4,000 – [$1.40 × (1,000 units × 3.0 hrs.)] 
Controllable Variance  =  $4,000 – $4,200 
Variable Factory Overhead 
Controllable Variance  = –$200 Favorable