Question

Walker, Inc., uses a standard cost system. Overhead cost information for Product One for the month of October follows: Total actual overhead incurred $14,750 Fixed overhead budgeted $1,800 Total standard overhead rate per direct labor hour $4.25 Variable overhead rate per direct labor hour $3.75 Standard hours allowed for actual production 3,500 What is the overall (or net) overhead variance?

Answer 1

$125

Step-by-step explanation:

Total actual overhead incurred $14,750

Less Standard hours allowed for actual production 3,500 ×Total standard overhead rate per

direct labor hour $4.25 ($14,875)

Overhead variance $125

Therefore the overall (or net) overhead variance is $125