The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours) 3 hours @ $.80 per hour
Variable overhead 3 hours @ $2.00 per hour
Actual Costs
Total variable cost, $18,000
Total fixed cost, $8,000
The amount of the factory overhead controllable variance is:
Answer
A.$2,000 unfavorable
B.$3,000 favorable
C.$0
D.$3,000 unfavorable
1000
To determine the factory overhead controllable variance, we need to compare the actual costs with the standard costs for the factory overhead.
First, let's calculate the standard costs for factory overhead:
Fixed overhead: 3 hours @ $0.80 per hour = $2.40
Variable overhead: 3 hours @ $2.00 per hour = $6.00
Next, let's calculate the total standard cost for factory overhead:
Total standard cost = Fixed overhead + Variable overhead
Total standard cost = $2.40 + $6.00 = $8.40
Now, let's compare the actual costs with the standard costs for factory overhead:
Total actual cost = Total variable cost + Total fixed cost
Total actual cost = $18,000 + $8,000 = $26,000
Controllable Variance = Actual Costs - Total Standard Cost
Controllable Variance = $26,000 - $8.40 = $25,991.60
Therefore, the amount of the factory overhead controllable variance is $25,991.60.
However, none of the given answer choices match this amount, so the correct answer would be C. $0.