A company has budgeted total overhead of $10,575 at actual units produced and actual total overhead of $9,775. The controllable variance is:

A company has budgeted total overhead of $10,575 at actual units produced and actual total overhead of $9,775. The controllable variance is:

• A. $800 Favorable
• B. $800 Unfavorable
• C. $-800
• D. $0

Answer: (A)

In overhead variance analysis, the controllable variance shows how well overhead costs were managed relative to what was planned for the actual level of production. Here, the company budgeted total overhead of 10,575 for the actual units produced, while the actual overhead incurred was 9,775. The difference is 10,575 − 9,775 = 800. Since actual spending is lower than the budget, this is a favorable variance, meaning overhead costs were controlled under plan. Therefore, the correct result is 800 Favorable.

In overhead variance analysis, the controllable variance shows how well overhead costs were managed relative to what was planned for the actual level of production. Here, the company budgeted total overhead of 10,575 for the actual units produced, while the actual overhead incurred was 9,775. The difference is 10,575 − 9,775 = 800. Since actual spending is lower than the budget, this is a favorable variance, meaning overhead costs were controlled under plan. Therefore, the correct result is 800 Favorable.