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Question(s) / Instruction(s):

. The following information was taken from the annual manufacturing overhead cost budget of Olson Company:

Variable manufacturing overhead costs ($4 per DLH) $124,000

Fixed manufacturing overhead costs ($2 per DLH) $62,000

Normal production level in direct labor hours 31,000

Normal production level in units 15,500

During the year, 15,000 units were produced, 32,000 hours were worked, and the actual manufacturing overhead costs were $190,000. The actual fixed manufacturing overhead costs did not deviate from the budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours.

Instructions (Show all computations)

Compute 1) the controllable variance, 2) the volume variance, and 3) the total overhead variance.

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