The1 - overhead cost variance of $57 favorable is the...

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The $175 unfavorable fixed cost spending variance indicates more was spent on fixed costs than was  budgeted. It is calculated by subtracting the budgeted fixed overhead per month of $3,625 from the  $3,800 actual fixed overhead. The $232 favorable volume variance indicates fixed overhead costs  are overapplied. This occurred because there were more units produced than planned. It is  calculated by subtracting the applied fixed overhead based on standard cost for units produced of  $3,857 (13,300 sets × $0.29 per unit) from budgeted fixed overhead of $3,625. The total fixed 
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Unformatted text preview: overhead cost variance of $57 favorable is the combination of the $175 unfavorable spending variance and the $232 favorable volume variance. When combined together, the variable overhead spending variance, the variable overhead efficiency variance, and the fixed cost spending variance equal the $717 unfavorable controllable variance calculated under the two-variance method previously discussed....
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