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22 October, 13:44

In October, Glazier Inc. reports 42,000 actual direct labor hours, and it incurs $194,000 of manufacturing overhead costs. Standard hours allowed for the work done is 40,000 hours. Glazier's predetermined overhead rate is $5.00 per direct labor hour.

Compute the total manufacturing overhead variance. Identify whether the variance is favorable or unfavorable? Total manufacturing overhead variance $

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  1. 22 October, 14:05
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    Over = $16,000 favorable

    Explanation:

    Giving the following information:

    In October, Glazier Inc. reports 42,000 actual direct labor hours, and it incurs $194,000 of manufacturing overhead costs. Standard hours allowed for the work done is 40,000 hours. Glazier's predetermined overhead rate is $5.00 per direct labor hour.

    Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

    Allocated MOH = 5*42,000 = 210,000

    Over/under allocation = real MOH - allocated MOH

    Over/under allocation = 194,000 - 210,000 = 16,000 favorable
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