Hello,

I need help calculating the controllable overhead variance and determining whether it is favorable, or unfavorable. In general, I am a little confused about how you make that determination (favorable vs unfavorable), so I am hoping that this question will help clear that up. Thank you!

Barret Hospital is interested in analyzing overhead related to laundry services. The hospital administrator estimated that monthly fixed costs would be $90,000, and variable costs would be $3.00 per patient day. During the month of September, the hospital had 19,000 patient days. Total laundry costs were $176,000. Analyze laundry costs for the month of September, using the procedures for calculating a controllable overhead variance. Is the variance favorable or unfavorable? (Enter variance as a positive number.)

Controllable Overhead Variance

$enter controlled overhead variance as a dollar amount

select an option Neither Unfavorable nor FavorableFavorableUnfavorable