Factory Overhead Cost Variances
Perma Weave Textiles Corporation began January with a budget for 28,000 hours of production in the Weaving Department. The department has a full capacity of 37,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the beginning of January was as follows:
Variable overhead$78,400
Fixed overhead55,500
Total$133,900
The actual factory overhead was $135,500 for January. The actual fixed factory overhead was as budgeted. During January, the Weaving Department had standard hours at actual production volume of 29,000 hours. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required.
a. Determine the variable factory overhead controllable variance.
b. Determine the fixed factory overhead volume variance.