Problem - Dinkel Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2010.
Costs and Production Data Actual Standard
Raw materials unit cost $3.15 $2.80
Raw materials units used 10,650 10,030
Direct labor payroll $171,598 $168,560
Direct labor hours worked 14,420 15,050
Manufacturing overhead incurred $184,900
Manufacturing overhead applied $265,482
Machine hours expected to be used at normal capacity 42,500
Budgeted fixed overhead for June $51,000
Variable overhead rate per hour $4.20
Fixed overhead rate per hour $1.68
Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The jobs were sold for $454,200. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used.
Compute the overhead controllable variance and the overhead volume variance.
1) Overhead controllable variance
2) Overhead volume variance