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10 December, 18:29

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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  1. 10 December, 18:39
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    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
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