Answer:
For (a) $21250 favorable (b) $21300 Unfavorable
Explanation:
Solution:
Now,
(a) The Standard rate of variable overhead = $450000/60000 = $7.50 per hour
so,
The Variable factory overhead controllable variance = Actual variable overhead costs - Standard variable overhead costs
Gives,
= (725000-262500)-(64500*7.50) = $21250 favorable
(b) The fixed factory overhead volume variance = Budgeted overhead - standard overhead
= 262500 - 262500*64500/60000
Therefore,
= $21300 Unfavorable