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having trouble with this Question 3. The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for

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Question 3. The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% of normal capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows: Standard hours at 100% of normal capacity 30,000 Standard hours for actual production 25,000 Standard total FOH cost (25,000 hours $10 per hour) $250,000 Actual Variable FOH costs $202,500 Actual Fixed FOH costs $60,000 Required: a. Calculate Variable FOH Controllable variance. b. Calculate Fixed FOH Volume variance. c. Calculate the total FOH variance. Solution: a. Variable FOH Controllable variance = Actual Variable FOH costs - Budgeted Variable FOH costs Budgeted Variable FOH costs = Standard Variable FOH rate x Standard hours for Actual Production Variable FOH Controllable variance = b. Fixed FOH Volume Variance = (Standard hours at 100% of normal capacity - Standard hours for Actual production ) x Standard FOH Rate c. Total FOH variance = VFOHCV + FFOHVV Alternatively, Total FOH variance = Actual FOH - Applied FOH

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