Dains Company planned to produce 20,000 units of product and work at the 60,000 direct labor hours level of activity for 2011. Manufacturing overhead at this level of activity and the predetermined overhead rate are as follows:
At the end of 2011, 21,000 units were actually produced and 61,500 direct labor hours were actually worked. Total actual manufacturing overhead costs were $488,000.
Instructions
Using a two-variance analysis of manufacturing overhead, calculate the following variances and indicate whether they are favorable or unfavorable:
(a) Overhead controllable variance.
(b) Overhead volume variance.

Question

Dains Company planned to produce 20,000 units of product and work at the 60,000 direct labor hours level of activity for 2011. Manufacturing overhead at this level of activity and the predetermined overhead rate are as follows:  
At the end of 2011, 21,000 units were actually produced and 61,500 direct labor hours were actually worked. Total actual manufacturing overhead costs were $488,000.
Instructions
Using a two-variance analysis of manufacturing overhead, calculate the following variances and indicate whether they are favorable or unfavorable:
(a) Overhead controllable variance.
(b) Overhead volume variance.

Quizplus · Accepted Answer

The Answer of Dains Company planned to produce 20,000 units of product and work at the 60,000 direct labor hours level of activity for 2011. Manufacturing overhead at this level of activity and the predetermined overhead rate are as follows:  
At the end of 2011, 21,000 units were actually produced and 61,500 direct labor hours were actually worked. Total actual manufacturing overhead costs were $488,000.
Instructions
Using a two-variance analysis of manufacturing overhead, calculate the following variances and indicate whether they are favorable or unfavorable:
(a) Overhead controllable variance.
(b) Overhead volume variance.

Dains Company Planned to Produce 20,000 Units of Product and Work