Question

Information on Shonda Company's overhead costs follows: Actual variable overhead $95,000 Actual fixed overhead $28,000 Standard hours allowed for actual production 30,000 Standard variable overhead rate per direct labor hour $3.25 Standard fixed overhead rate per direct labor hour $1.00 What is the total overhead variance?

Answer 1

Answer:

Total Overhead Variance    $ 4,500 Favorable.

Explanation:

Shonda Company

Actual variable overhead $95,000

Actual fixed overhead $28,000

Standard hours allowed for actual production 30,000

Standard variable overhead rate per direct labor hour $3.25

Standard fixed overhead rate per direct labor hour $1.00

The total overhead variance can be calculated as follows.

Actual Overhead = $ 95,000+ $ 28,000= $ 123,000

Overhead Charged to Production= ( $ 4.25 * 30000 Hours)= $ 127,500

Total Overhead Variance    $ 4,500 Favorable.