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Concept explainers
Controllable Variance:
The overall variance which comprises of variable
Volume Variance:
The variance which arises due to difference in the budgeted level of activity and the actual level is called volume variance. The sole reason for this kind of variance is the variation in the level of activity.
Computation of Variances and classification of favorable or unfavorable
1. Overhead volume variance
2. Overhead controllable variance
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Answer to Problem 20E
Solution:
1. Overhead Volume Variance is $6,250 and it is unfavorable.
2. Overhead Controllable Variance is $20,000 and it is favorable.
Explanation of Solution
1. Overhead Volume Variance
2. Overhead Controllable Variance
World Company had unfavorable variance of $6,250 in volume variance and favorable variance of $20,000 in the controllable variance.
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Chapter 23 Solutions
Connect Access Card For Fundamental Accounting Principles
- What is the gross profit?arrow_forwardKelvin enterprises has the following reported amountsarrow_forwardDepartment A had 15,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period; 45,600 units of direct materials were added during the period; 42,500 units were completed during the period, and 11,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was ____ Units. Need Solutionarrow_forward
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