Question

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 $

Answer 1

Answer:

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