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8 December, 11:49

Bellingham Company produced 2,500 units of product that required 6 standard direct labor hours per unit. The standard variable overhead cost per unit is $4.90 per direct labor hour. The actual variable factory overhead was $71,150. Determine the variable factory overhead controllable variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number

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  1. 8 December, 12:29
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    Answer: - $2,350

    Explanation:

    First we will calculate the labour costs of the product as,

    Standard labour overheads required,

    = 2,500*6

    = $15,000

    Using the above figure we will then calculate the Standard Overhead Cost as,

    Standard overhead cost

    = 4.9 * 15,000 hours

    = $73,500

    But the Actual overhead cost = $71,150

    The Variance is calculated as,

    = standard overhead cost - actual overhead cost

    = 73,500 - 71,150

    = $2,350 Favorable.

    = - $2,350

    If you need any clarification do react or comment.
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