Steep, Inc. budgeted 6,000 cup holders for March. Each holder is sold for $12. Actual production for March was 6,300 cup holders. Manufacturing overhead is applied based on units produced. Standards and actual costs follow for March:
$\begin{array}{|l|c|c|}
\hline &\text { Standards }&\text { Actual }\
\hline \text { Materials } & 1.1 \text { pounds @ \$2.40 a pound } & \begin{array}{c}
6,400 \text { pounds purchased for } \$ 15,040 \
6,450 \text { pounds used }
\end{array} \
\hline \text { Labor } & 0.10 \text { hours @ } \$ 14.00 \text { per hour } & 620 \text { hours @ } \$ 14.30 \text { per hour } \
\hline \text { Variable overhead } & \$ 16,800 & \$ 18,400 \
\hline \text { Fixed overhead } & \$ 9,600 & \$ 10,300\
\hline
\end{array}$
How much is the overhead controllable variance?

Question

Quizplus · Accepted Answer

The overhead controllable variance is calculated by comparing the actual overhead costs to the budgeted overhead costs for the actual level of activity. The actual overhead costs are $18,400 (variable) + $10,300 (fixed) = $28,700. The budgeted overhead costs for 6,300 units are $16,800 (variable) + $9,600 (fixed) = $26,400. The variance is $28,700 - $26,400 = $2,300 unfavorable.

Steep, Inc How Much Is the Overhead Controllable Variance? A) $1,460 Unfavorable

Steep, Inc How Much Is the Overhead Controllable Variance?
A) $1,460 Unfavorable