ECONOMICS

Detailed explanation-1: -Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a controllable variance. Standard costs are used by the company to value inventory.

Detailed explanation-2: -Definition: The controllable variance consists of a combination of variable and fixed overhead variances that management has influence over. In other words, it’s a set of overhead variances that management has the power to change or manipulate.

Detailed explanation-3: -An unfavorable fixed overhead budget variance results when the actual amount spent on fixed manufacturing overhead costs exceeds the budgeted amount.

Detailed explanation-4: -The direct labor time variance measures the efficiency of the direct labor force. The variance from standard for factory overhead cost resulting from operating at a level above or below 100% of normal capacity is termed volume variance.