Giovanni Company produced 3,500 units of product that required five standard hours per unit.

Giovanni Company produced 3,500 units of product that required five standard hours per unit. The standard variable overhead cost per unit is $3.50 per hour. The actual variable factory overhead was $63,400. Determine the variable factory overhead controllable variance.

Answer:

Variable Factory Overhead 

Controllable Variance  =  $63,400 – [$3.50 × (3,500 units × 5 hrs.)] 

Variable Factory Overhead 

Controllable Variance 

Variable Factory Overhead 

Controllable Variance 

=  $63,400 – $61,250 

=  $2,150 Unfavorable