Question 22.3: Tip Top Corp. produced 3,000 units of product that required ...

Tip Top Corp. produced 3,000 units of product that required 2.5 standard hours per unit. The standard variable overhead cost per unit is $2.20 per hour. The actual variable factory overhead was $16,850. Determine the variable factory overhead controllable variance.

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Variable Factory Overhead Controllable Variance = Actual Variable Factory       Budgeted Variable Factory

Overhead         –         Overhead

Variable Factory Overhead Controllable Variance = $16,850 – [(3,000 units × 2.5 hrs.) × $2.20]

Variable Factory Overhead Controllable Variance = $16,850 – $16,500

Variable Factory Overhead Controllable Variance = $350 Unfavorable Variance

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