Question

Exercise 11-11 (Video) Manufacturing overhead data for the production of Product H by Shakira Company, assuming the company uses a standard cost system, are as follows. Overhead incurred for 54,500 actual direct labor hours worked $331,500 Overhead rate (variable $5; fixed $1) at normal capacity of 56,400 direct labor hours $6 Standard hours allowed for work done 55,650 Compute the total overhead variance.

Answer 1

Answer:

$2,400 Favorable

Explanation:

Total overhead variance = Actual overhead - Budgeted overhead

Actual overhead $331,500

Budgeted overhead

($55,650×$6) $333,900

Hence:

$331,500-$333,900

=$2,400 Favorable

Therefore the total overhead variance will be $2,400 Favorable