Question: The standard factory overhead rate is $12 per machine hour ($10 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 42,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 2,000 units were as follows:
Actual: Variable factory overhead $350,500
Fixed factory overhead $84,000
Standard: 35,000 hours @$12 $420,000
Required - Determine the (a) volume variance, (b) controllable variance, and (c) total factory overhead cost variance.
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