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?

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12 December, 12:35

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?

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Sariah Boone · Answer 1

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.