At the start of 2017, Capital Cemetery determined its standard labor cost to be 2.5 hours for each cemetery plot prepared at $14.00 per hour.The budget for variable overhead was $8 per plot and budgeted fixed overhead was $15,000 for the year.Overhead is applied based on the number of plots prepared.The company expects to prepare 5,000 plots during 2017.During 2017, the actual cost of labor was $14.30 per hour.Capital prepared 4,900 cemetery plots requiring 11,700 direct labor hours.Actual overhead for the year was $52,100.How much is the controllable overhead variance?

Question

Quizplus · Accepted Answer

Controllable overhead variance is the difference between actual overhead and budgeted overhead. In this case, actual overhead is $52,100 and budgeted overhead is $23,000 ($8 per plot x 5,000 plots + $15,000 fixed overhead). Therefore, the controllable overhead variance is $52,100 - $23,000 = $29,100 favorable.

At the Start of 2017, Capital Cemetery Determined Its Standard