Question

Baylor Company has actual total overhead of $1,900. The standard

overhead applied is $2,000. What is the overhead
variance?
multiple choice
$100 Favorable
$100 Unfavorable
$300 Favorable
$300

Answer 1

The overhead variance is $100 Favorable.

Step-by-step explanation:

The overhead variance can be calculated by subtracting the actual total overhead from the standard overhead applied. In this case, the standard overhead applied is $2,000 and the actual total overhead is $1,900. So the variance is $2,000 - $1,900 = $100. Since the actual total overhead is less than the standard overhead applied, the variance is favorable. Therefore, the correct answer is $100 Favorable.

Answer 2

The overhead variance is $100 unfavorable.

Step-by-step explanation:

Overhead variance refers to the difference between the actual overhead costs incurred by a business and the standard overhead costs expected during a specific period. It is a key metric in cost accounting used to assess the efficiency and cost-effectiveness of operations. A favorable overhead variance indicates that actual costs were lower than expected, while an unfavorable variance suggests that costs exceeded the standard.

Analyzing these variances helps businesses optimize resource utilization and control expenses. The overhead variance can be calculated by subtracting the actual overhead from the standard overhead applied. In this case, the actual total overhead is $1,900 and the standard overhead applied is $2,000. Therefore, the overhead variance is $100 unfavorable.