Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system for 2014:
$\begin{array}{ll}\text { Budgeted and Standard Data }&\text { Actual Data }\
\begin{array}{|l|l|}
\hline \text { Material } & 1 / 41 \mathrm{~b} . @ \$ 14 \text { per pound } \
\hline \text { Labor } & 1.4 \mathrm{hrs} @ \$ 16 \text { per hour } \
\hline \text { Total fixed overhead } & \$ 84,000 \
\hline \text { Variable overhead } & \$ 6.50 \text { per unit } \
\hline \text { Production } & 6,000 \text { units }\\hline
\end{array}&\begin{array}{|l|l|}
\hline \text { Produced } & 6,200 \text { units } \
\hline \text { Materials purchased } & 1,600 \mathrm{lbs} . \text { for } \$ 13.70 / \text { pound } \
\hline \text { Materials used } & 1,520 \mathrm{lbs} . \
\hline \text { Labor worked } & 8,740 \mathrm{hrs} . \text { at } \$ 15.90 / \text { hour } \
\hline \text { Total overhead } & \$ 122,000\\hline
\end{array}
\end{array}$
How much is the overhead controllable variance for 2014?

Question

Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system for 2014:
$\begin{array}{ll}\text { Budgeted and Standard Data }&\text { Actual Data }\
\begin{array}{|l|l|}
\hline \text { Material } & 1 / 41 \mathrm{~b} . @ \$ 14 \text { per pound } \
\hline \text { Labor } & 1.4 \mathrm{hrs} @ \$ 16 \text { per hour } \
\hline \text { Total fixed overhead } & \$ 84,000 \
\hline \text { Variable overhead } & \$ 6.50 \text { per unit } \
\hline \text { Production } & 6,000 \text { units }\\hline 
\end{array}&\begin{array}{|l|l|}
\hline \text { Produced } & 6,200 \text { units } \
\hline \text { Materials purchased } & 1,600 \mathrm{lbs} . \text { for } \$ 13.70 / \text { pound } \
\hline \text { Materials used } & 1,520 \mathrm{lbs} . \
\hline \text { Labor worked } & 8,740 \mathrm{hrs} . \text { at } \$ 15.90 / \text { hour } \
\hline \text { Total overhead } & \$ 122,000\\hline
\end{array}
\end{array}$
How much is the overhead controllable variance for 2014?

Quizplus · Accepted Answer

The overhead controllable variance is the difference between the actual overhead costs and the budgeted overhead costs for the actual level of production. In this case, the actual overhead costs are $122,000 and the budgeted overhead costs for the actual level of production are $124,800 (6,200 units x $6.50 per unit + $84,000). Therefore, the overhead controllable variance is $2,800 favorable.

Harris Manufacturing Produces White Sauce How Much Is the Overhead Controllable Variance for 2014? A)

Harris Manufacturing Produces White Sauce How Much Is the Overhead Controllable Variance for 2014?
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