Respuesta :
Answer:
A) $ 1,200 favorable
Explanation:
Computation of variance
Flexible Budget Units                                 48,000 units
Total variable costs at budget level                    $ 72,000
Variable costs per unit = $ 72,000/ 48,000 Â Â Â Â Â Â Â Â Â Â Â Â Â $ 1.50 per unit
Actual Production Units                                40,000 units
Total overhead costs
Variable $ 1.50 * 40,000 units                         $ 60,000
Fixed overhead costs                                $ 64,000
Total Budgeted overhead costs at 40,000 units          $ 124,000
Actual Overhead costs                              $ 122,800
Variance Favorable                                  $   1,200       Â
Answer:
A) $ 1,200 favorable
Explanation:
The standard variable overhead cost per unit is equal to
= Variable overhead cost at a given units/number of units
= Â $72,000 /48,000 units
= Â $1.5 per unit
  Controllable cost variance  Â
                                                 $                                                   Â
Standard cost for 40,00 units= ( $1.5 × 40,000)         = 60,000
Actual variable overheads  (122,800 -64,000)            58,800
Variance                                      1,200 favourable         Â
Note that we had to deduct $64,000 fixed costs from the total overhead figure because it is uncontrollable.
