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World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At this planned level, the company expeds to use
World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At this planned level, the company expeds to use 25,000 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.625 direct labor hour per unit. At the 80% capacity level, the total budgeted cost includes $50,000 fixed overhead cost and $275,000 variable overhead cost. In the current month, the company incurred $305,000 actual overhead and 22,000 actual labor hours while producing 35,000 units (1) Compute the overhead volume variance Classify each as favorable or unfavorable. (2) Compute the overhead controllable variance Classify each as favorable or unfavorable. Complete this question by entering your answers in the tabs below. Required: Required 2 Compute the overhead volume variance. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Fixed Overhead Applied Fixed OH per DL hr $ 2.00 Standard DL hours 21,875 Foed overhead applied $ 50,000 Volume Variance Total fixed overhead applied 5 44,100 Total budgetod fixed OH 50 000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the overhead volume variance Classily as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Fixed Overhead Applied Fixed OH per Dhr 2.00 Standard DL hours 21,875 Fixed overhead applied $ 50,000 Volume Variance Total fixed overhead applied 44,100 Total budgeted fixed OH 50,000 Volume variance $ 20,625 Unfavorable $ Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the overhead controllable variance. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Total actual overhead Flexible budget overhead Total 0 Overhead controllable variance
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