Required information
Overhead variances are due to differences between the actual overhead costs incurred and the overhead applied to production. The overhead controllable variance equals the actual overhead minus the budgeted overhead. The volume variance equals the budgeted fixed overhead minus the applied fixed overhead.
B-Max Company
Overhead Variance Report
For the Month Ended June
Volume Variance
Expected: 500 units at 80% Capacity
Actual: 400 units at 64% Capacity
Volume Variance: $600 Unfavorable
Controllable Variance | Flexible Budget | Actual Results | Variances
Variable costs
Indirect materials | $2,000 | $2,200 | $200 U
Indirect labor | 1,200 | 1,175 | 25 F
Utilities | 1,600 | 1,650 | 50 U
Total variable costs | 4,800 | 5,025 | 225 U
Fixed costs
Depreciation - machinery | 2,000 | 2,000 | 0
Building rent | 1,000 | 1,000 | 0
Total fixed costs | 3,000 | 3,000 | 0
Total factory overhead | $7,800 | $8,025 | $225 U
Knowledge Check 01
An overhead variance report includes: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
? Variable and fixed flexible budget costs
? Variable and fixed actual results
? Variable and fixed sales results