Calculation of Controllable variance
A Controllable Variance refers to the “rate” segment of a variance. A variance is consisting of of two primary elements, which are the volume variance and the rate variance. Controllable Variance is calculated as
actual factory overhead – budgeted allowance on Std hours.
Factory Overhead Controllable Variance: Learning Objective of the article: Define and explain factory overhead controllable variance. How FOH controllable variance is calculated? What are the reasons / causes of unfavorable controllable variance? Contents: Definition Formula of factory overhead controllable variance Example Reasons / causes