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Problem - Factory overhead cost variances - Osceola Textiles Corporation began May with a budget for 45,000 hours of production in the Weaving Department. The department has a full capacity of 60,000 hours under normal business conditions. The budgeted overhead at the planned volumes at the beginning of May was as follows:
Variable overhead $990,000
Fixed overhead 300,000
Total $1,290,000
The actual factory overhead was $1,428,000 for May. The actual fixed factory overhead was as budgeted. During May, the Weaving Department had standard hours at actual production volume of 52,000 hours.
Required -
a. Determine the variable factory overhead controllable variance.
b. Determine the fixed factory overhead volume variance.
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