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 Standard hours for actual production Standard total FOH cost (25,000 hours $10 per hour) Actual Variable FOH costs Actual Fixed FOH costs 30,000 25,000 $250,000 $202,500 $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