Caroline, Inc. planned to produce 20,000 units of product and work 100,000 direct labor hours in 2013. Manufacturing overhead at the 100,000 direct labor hours level of activity was estimated to be:
Variable manufacturing overhead............... $ 700,000
Fixed manufacturing overhead............... 300,000
Total manufacturing overhead............... $1,000,000
At the end of 2013, 19,000 units of product were actually produced and 98,000 actual direct labor hours were worked. Total actual overhead costs for 2013 were $935,000.
Instructions
(a) Compute the total overhead variance.
a(b) Compute the overhead controllable variance.
a(c) Compute the overhead volume variance.