Total Overhead Variance The total overhead variance is the indifference between the projected overhead balances and the actual overheads incurred during the production process. It includes both, fixed and variable aspects of the production and tends to reveal the overall variance in terms of the deviations between the standardized expenses that were budgeted and the actually incurred at paves way for the management to take corrective measures for the same. Controllable Overhead Variance: The controllable overhead variance is the deviation of budgeted overhead of standard number of units from the actual expenses incurred popularly within the factory overheads. Also, controllable overhead variance is confined to factory overheads irrespective of any in the volume. Through this the unexpected costs may be minimized by keeping the track record of expenses and comparing them with the standard ones. Total overhead variance and controllable overhead variance for the period and classify them as favorable and unfavorable.

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Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2025, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $16,800, direct labor $10,080, and manufacturing overhead $13,440. As of January 1, Job 49 had been completed at a cost of $75,600 and was part of finished goods inventory. There was a $12,600 balance in the Raw Materials Inventory account on January 1. During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $102,480 and $132,720, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $75,600 on account. 2. Incurred factory labor costs of $58,800. 3. Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,080; and various other…

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Chapter 21, Problem 15QS

To determine

Total Overhead Variance

The total overhead variance is the indifference between the projected overhead balances and the actual overheads incurred during the production process. It includes both, fixed and variable aspects of the production and tends to reveal the overall variance in terms of the deviations between the standardized expenses that were budgeted and the actually incurred at paves way for the management to take corrective measures for the same.

Controllable Overhead Variance:

The controllable overhead variance is the deviation of budgeted overhead of standard number of units from the actual expenses incurred popularly within the factory overheads. Also, controllable overhead variance is confined to factory overheads irrespective of any in the volume. Through this the unexpected costs may be minimized by keeping the track record of expenses and comparing them with the standard ones.

Total overhead variance and controllable overhead variance for the period and classify them as favorable and unfavorable.

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Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2025, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $16,800, direct labor $10,080, and manufacturing overhead $13,440. As of January 1, Job 49 had been completed at a cost of $75,600 and was part of finished goods inventory. There was a $12,600 balance in the Raw Materials Inventory account on January 1. During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $102,480 and $132,720, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $75,600 on account. 2. Incurred factory labor costs of $58,800. 3. Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,080; and various other…

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