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6 January, 00:00

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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  1. 6 January, 00:19
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    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.
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