Answered Essay: World Company expects to operate at 80% of its productive capacity of 70,000 units per month. At this planned level, the comp

World Company expects to operate at 80% of its productive capacity of 70,000 units per month. At this planned level, the company expects to use 25,200 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate based on direct labor hours. At the 80% capacity level, the total budgeted cost includes $57,960 fixed overhead cost and $322,560 variable overhead cost. In the current month, the company incurred $386,000 actual overhead and 22,200 actual labor hours while producing 53,000 units.

(1) Compute the overhead volume variance. (Round all your intermediate calculations to 2 decimal places.)

(2) Compute the overhead controllable variance.

Expert Answer


Variable overhad = 322560

Fixed overhead = 57960

Productive capacity = 70,000 units

Variable Overhead rate = variable overhead cost / standard hours

= 322,560 / 25,200

= 12.80

Fixed overhead rate =  Fixed overhead cost / standard hours

= $57960 / 25200

= 2.3

Total overhead rate = 12.80 +2.30 = 15.10

Assumed the budgeted production = 56000 units

Standard direct labor hour per unit = 25200/56000 = 0.45

Standard hours to product 53000 units = 53000 * .45= 23850

OH applied 53000 units OH rate Std Hrs Applied OH Budget Volume variance
Fixed overhead 2.3 23850 54855 57960 3105 Unfavourable


OH rate Std Hrs Applied OH Budget Total OH variance
Total Overhead 15.1 23850 360135 386000 25865 Unfavourable

Total OH variance = 25865 unfavourable

Volume variance = 3105 unfavaurable

OH controllable variance = 22760 unfavourable

Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.


Let us write that nagging essay.


Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.


Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.


Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.


Receive your Paper

After Editing, your paper will be sent to you via email.

× How can I help you?