Question

Factory Overhead Controllable Variance Bellingham Company produced 3,000 units of product that required 6.5 standard direct labor hours per unit. The standard variable overhead cost per unit is $5.60 per direct labor hour. The actual variable factory overhead was $113,350. 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

Formula to calculate variable factory overhead controllable variance
Variable factory overhead controllable variance	Actual variable factory overhead - Budgeted variable factory overhead
Variable factory overhead controllable variance	113,350-(3000*6.5*5.60)
Variable factory overhead controllable variance	113,350-109,200
Variable factory overhead controllable variance	$4,150
The actual variable factory overhead is higher than budgeted variable factory overhead and thus the variance is unfavorable.
Variable factory overhead controllable variance	$4,150	unfavorable