Question

The predetermined overhead rate for Zane Production Company is $10, comprised of avariable overhead rate of $6 and a fixed rate of $4. The amount of budgeted overheadcosts at normal capacity of $300,000 was divided by normal capacity of 30,000 directlabor hours, to arrive at the predetermined overhead rate of $10. Actual overhead forJune was $19,000 variable and $12,100 fixed, and standard hours allowed for theproduct produced in June was 3,000 hours. The total overhead variance is

Answer 1

The total variance will befor 3,100 unfavorable

Step-by-step explanation:

Variable overhead variance:

3,000 hours x 6 variable overhead = 18,000 variable - 19,000 = 1,000 Unfavorable

Fixed overhead:

30,000 x 4 = 120,000 fixed per year

120,000 / 12 monht a year = 10,000 fixed overhead per month

actual fixed 12,100

variance 2,100 unfavorable

total variance 3,100 U