Underfoot Products uses standard costing. The following information about overhead was generated during May: Standard variable overhead rate$2 per machine hour Standard fixed overhead rate$1 per machine hour Actual variable overhead costs$390,000 Actual fixed overhead costs$175,000 Budgeted fixed overhead costs$190,000 Standard machine hours per unit produced10 Good units produced18,000 Actual machine hours200,000 Using the above information provided for Underfoot Products, compute the total variable overhead variance.

Question

Business

Karsyn Little

11 January, 22:51

Underfoot Products uses standard costing. The following information about overhead was generated during May: Standard variable overhead rate$2 per machine hour Standard fixed overhead rate$1 per machine hour Actual variable overhead costs$390,000 Actual fixed overhead costs$175,000 Budgeted fixed overhead costs$190,000 Standard machine hours per unit produced10 Good units produced18,000 Actual machine hours200,000 Using the above information provided for Underfoot Products, compute the total variable overhead variance.

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Alberto · Answer 1

Total Variable overhead variance $30,000 Unfavorable

Explanation:

Standard variable overhead per unit

= $2 per hour * 10 hours per unit

= $20 per unit

$

18,000 units should have cost (18,000 * $20 per unit) = 360000

but did cost 390,000

Total Variable overhead variance 30,000 Unfavorable