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A company's flexible budget for 54,000 units of production showed variable overhead costs of $97,200 and fixed overhead costs of $70,000. The company incurred overhead costs of $151,540 while operating at a volume of 46,000 units. The total controllable cost variance is: Multiple Choice $1,260 favorable. $1,260 unfavorable. $15,660 favorable. $15,660 unfavorable. $17,660 favorable.

Respuesta :

To find the total controllable cost variance, we first need to calculate the flexible budget overhead costs for the actual level of production (46,000 units).

Given:
- Variable overhead costs for 54,000 units = $97,200
- Fixed overhead costs = $70,000

Using the flexible budget formula:
Flexible Budget Overhead Costs = Variable Overhead Costs + Fixed Overhead Costs
Flexible Budget Overhead Costs = $97,200 + $70,000
Flexible Budget Overhead Costs = $167,200

Now, we compare the flexible budget overhead costs with the actual overhead costs incurred at the actual level of production (46,000 units).

Actual Overhead Costs = $151,540

Total Controllable Cost Variance = Flexible Budget Overhead Costs - Actual Overhead Costs
Total Controllable Cost Variance = $167,200 - $151,540
Total Controllable Cost Variance = $15,660 unfavorable

Therefore, the correct answer is:
$15,660 unfavorable.



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