The variable factory overhead controlled variance is difference between the budgeted and actual variable factory overhead. The fixed factory overhead volume variance is the difference between the standard fixed factory overhead at actual production and at 100 % of normal capacity. The variable and fixed factory overhead controlled variance is that variance which does not change with change in volume. The response to the problem faced by the plant manager in regard to the unfavorable controllable variance.

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Chapter 13, Problem 13.7C

To determine

Concept Introduction:

The variable factory overhead controlled variance is difference between the budgeted and actual variable factory overhead.

The fixed factory overhead volume variance is the difference between the standard fixed factory overhead at actual production and at 100% of normal capacity.

The variable and fixed factory overhead controlled variance is that variance which does not change with change in volume.

The response to the problem faced by the plant manager in regard to the unfavorable controllable variance.

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