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Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation...

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Accounting

Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period.
Flexible Budget at 80% Capacity Actual Results
Production (in units)50,00044,000
Overhead
Variable overhead $ 275,000
Fixed overhead 50,000
Total overhead $ 325,000 $ 305,000
Exercise 21-18(Static) Volume and controllable variances LO P4
(1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable.
(2) Compute the overhead controllable variance. Indicate variance as favorable or unfavorable.

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