World Company expects to operate at 80% of its productive capacity of 63,750 units per...
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World Company expects to operate at 80% of its productive capacity of 63,750 units per month. At this planned level, the company expects to use 35,700 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.700 direct labor hours per unit. At the 80% capacity level, the total budgeted cost includes $64,260 fixed overhead cost and $439,110 variable overhead cost. In the current month, the company incurred $500,000 actual overhead and 32,700 actual labor hours while producing 48,000 units. (1) Compute the overhead volume variance. (2) Compute the overhead controllable variance.
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