Question

Underfoot Products uses standard costing. The following information about overhead was generated during May: Standard variable overhead rate$2 per machine hour Standard fixed overhead rate$1 per machine hour Actual variable overhead costs$390,000 Actual fixed overhead costs$175,000 Budgeted fixed overhead costs$190,000 Standard machine hours per unit produced10 Good units produced18,000 Actual machine hours200,000 Using the above information provided for Underfoot Products, compute the total variable overhead variance.

Answer 1

Total Variable overhead variance $30,000 Unfavorable

Step-by-step explanation:

Standard variable overhead per unit

= $2 per hour × 10 hours per unit

= $20 per unit

$

18,000 units should have cost (18,000× $20 per unit) = 360000

but did cost 390,000

Total Variable overhead variance 30,000 Unfavorable