The variable factory overhead controllable variance is
A) $8,981.75 favorable
B) $7,280.75 unfavorable
C) $8,981.75 unfavorable
D) $7,280.75 favorable

Question

Quizplus · Accepted Answer

The variable factory overhead controllable variance formula is Actual Variable Overhead - (Actual Hours Worked x Variable Overhead Rate). Plugging in the numbers, we get $67,461 - ($352,800 x $0.22) = $67,461 - $77,080 = $-9,619. This means the actual variable overhead is $9,619 more than what it should have been based on the actual hours worked. Since this is unfavorable, the answer is B, which represents the amount of the unfavorable variance.

The Variable Factory Overhead Controllable Variance Is