Question

Harrangue Company's standard variable overhead rate is $6 per direct labor hour, and each unit requires 2 standard direct labor hours. During March, Harry recorded 6,000 actual direct labor hours, $37,000 actual variable overhead costs, and 2,900 units of product manufactured. What is the total variable overhead variance for March for Harrangue?

Answer 1

Total variable overhead variance is express = 2,200

Step-by-step explanation:

given data

overhead rate = $6 per direct labor hour

actual direct labor hours = 6,000

actual variable overhead costs = $37,000

product manufactured = 2,900 units

to find out

total variable overhead variance

solution

we find here standard variable overhead that is

standard variable overhead = 2900 unit × $6 × 2 DL hours

standard variable overhead = $34,800

and

Total variable overhead variance is express as

Total variable overhead variance is express = actual variable overhead - standard variable overhead

so

Total variable overhead variance is express = 37,000 - 34,800

Total variable overhead variance is express = 2,200