The Standard Factory Overhead Rate Is $12 Per Machine Hour

question 178

Essay

The standard factory overhead rate is $12 per machine hour ($10 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 42,000 machine hours.The standard cost and the actual cost of factory overhead for the production of 2,000 units were as follows: $\begin{array}{lr}\text { Actual: Variable factory overhead } & \$ 350,500 \\\text { Fixed factory overhead } & 84,000 \\\text { Standard: } 35,000 \text { hours } @ \$ 12 & 420,000\end{array}$ ?
Determine the (a) volume variance, (b) controllable variance, and (c) total factory overhead cost variance.

---

Definitions:

Y Intercept

The y-intercept is the point where a line or curve intersects the y-axis of a graph.

Y Predictor

A variable used in statistical models to predict another variable, often denoted as the independent variable.

Regression Line

A straight line that best fits the data on a scatterplot, showing the average relationship between the independent and dependent variables.

Slope

The gradient or tilt of a line on a graph, indicating the relationship between two variables.