Harrah Manufacturing Company Uses a Standard Cost System and Prepared $\mathrm{OH}$

Harrah Manufacturing Company uses a standard cost system and prepared the following budget at normal capacity for October:
Directlabor hours                                  24,000
Variable $\mathrm{OH}$                                           $\$ 48,000$
Fixed $\mathrm{OH}$                                                  $\$ 108,000$
Total $\mathrm{OH}$ per $\mathrm{DLH}$                                    $\$ 6.50$

Actual data for October were as follows:
Directlabor hours worked                            22,000
Total $\mathrm{OH}$                                                   $\$ 147,000$
StandardDLHs allowed for capacity attained             21,000
Using the two-way analysis of overhead variances,what is the controllable variance for October?

A) $ 3,000 F
B) $ 5,000 F
C) $ 9,000 F
D) $10,500 U

Correct Answer:

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