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Gekata [30.6K]
3 years ago
13

JT Engineering has determined that it should cost $14,000 indirect materials, $12,600 indirect labor, and $6,200 in total overhe

ad to produce 1,000 widgets. During the most recent period, JT actually spent $13,860 indirect materials, $12,420 indirect labor, and $6,500 in total overhead to produce 1,000 widgets. What is JT’s total variance? Is it favorable or unfavorable?
Mathematics
1 answer:
nika2105 [10]3 years ago
8 0

Answer:

  • total variance: -$20
  • favorable

Step-by-step explanation:

The estimated cost is ...

  $14000 +12600 +6200 = $32800

The actual cost is ...

  $13860 +12420 +6500 = $32780

The variance is the difference between actual cost and predicted cost:

  $32,780 - 32800 = -$20.

It is favorable when actual costs are lower than predicted.

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