Caroline, Inc. planned to produce 20,000 units of product and work 100,000 direct labor hours in 2016. Manufacturing overhead at the 100,000 direct labor hours level of activity was estimated to be:
At the end of 2016, 19,000 units of product were actually produced and 98,000 actual direct labor hours were worked. Total actual overhead costs for 2016 were $935,000.
Instructions
(a) Compute the total overhead variance.
(b) Compute the overhead controllable variance.
(c) Compute the overhead volume variance.

Question

Caroline, Inc. planned to produce 20,000 units of product and work 100,000 direct labor hours in 2016. Manufacturing overhead at the 100,000 direct labor hours level of activity was estimated to be:  
At the end of 2016, 19,000 units of product were actually produced and 98,000 actual direct labor hours were worked. Total actual overhead costs for 2016 were $935,000.
Instructions
(a) Compute the total overhead variance.
(b) Compute the overhead controllable variance.
(c) Compute the overhead volume variance.

Quizplus · Accepted Answer

The Answer of Caroline, Inc. planned to produce 20,000 units of product and work 100,000 direct labor hours in 2016. Manufacturing overhead at the 100,000 direct labor hours level of activity was estimated to be:  
At the end of 2016, 19,000 units of product were actually produced and 98,000 actual direct labor hours were worked. Total actual overhead costs for 2016 were $935,000.
Instructions
(a) Compute the total overhead variance.
(b) Compute the overhead controllable variance.
(c) Compute the overhead volume variance.