Reference no: EM132707139

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.