Answer:
<em>Total Overhead Variance $156750 Favorable </em>
Explanation:
Given Data
Byrd Company
Normal production capacity 100,000 units per year
Direct Labor Hours at normal capacity = 100,000
Total budgeted overhead at normal capacity is $1,100,000
Variable costs $400,000
Fixed costs$700,000
Actual Production 71,800 putters
Actual Direct Labor Hours 99,000
Actual Variable Overheads $ 197450
Actual Fixed Overhead Costs $ 734,800
<u><em>Formulae And Calculations</em></u>
Predetermined Variable Overhead Rate = Variable Costs / Direct Labor Hours
Predetermined Variable Overhead Rate = $400,000 / $100,000 = $ 4 per hour
Predetermined Fixed Overhead Rate = Fixed Costs / Direct Labor Hours
=$700,000 / $100,000 = $ 7 per hour
Applied Overhead = Applied Variable Costs + Applied Fixed Costs
= $ 4*99,000+ $ 7 *99,000= $ 396,000 + $ 693,000=
Applied Overhead =$ 1089,000
Total Overhead Variance = Actual Overhead - Overhead Applied
Total Overhead Variance =$ 197450+ $ 734,800-$ 1089,000
=932250-$ 1089,000= $156750 Favorable
It is favorable because actual is less than applied.
