The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows: The amount of the factory overhead controllable variance is:
A) $2,000 unfavorable
B) $3,000 favorable
C) $0
D) $3,000 unfavorable

Question

The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:  The amount of the factory overhead controllable variance is:
A) $2,000 unfavorable 
B) $3,000 favorable 
C) $0 
D) $3,000 unfavorable

Quizplus · Accepted Answer

The formula to calculate the factory overhead controllable variance is:

(Flexible Budget for actual output - Actual Overhead Cost)

= $70,000 - $73,000

= $3,000 unfavorable.

Therefore, the correct answer is D.

The Standard Costs and Actual Costs for Factory Overhead for the Manufacture