The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150000 was divided by normal capacity of 30000 direct labor hours, to arrive at the predetermined overhead rate of $5. Actual overhead for June was $9500 variable and $6050 fixed, and standard hours allowed for the product produced in June was 3000 hours. The total overhead variance is

Total Overhead Variance = $500 unfavorable

Explanation:

The total overhead variance is the difference between actual overhead and the applied overhead.

Actual Overhead = Variable + Fixed = $9500 + $6050 = $ 15,550

Budgeted Overhead for 30000 direct labor hours = $ 150,000

Applied Overhead for 3000 hours = 3000 * $5 = $15000

Total Overhead Variance = Actual Overhead Less Applied Overhead

= $15,500 - $ 15000 = $500 unfavorable

As actual is greater than applied it is unfavorable.