Manufacturing overhead data for the production of Product H by Shakira Company, assuming the company uses a standard cost system, are as follows. Overhead incurred for 46,000 actual direct labor hours worked $373,200 Overhead rate (variable $7; fixed $1) at normal capacity of 50,700 direct labor hours $8 Standard hours allowed for work done 46,750 Compute the total overhead variance. Total overhead variance $enter the total overhead variance in dollars select an option Neither favorable nor unfavorableFavorableUnfavorable
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Manufacturing
| Overhead incurred for 46,000 actual direct labor hours worked | $373,200 | |
| Overhead rate (variable $7; fixed $1) at normal capacity of 50,700 direct labor hours | $8 | |
| Standard hours allowed for work done | 46,750 |
Compute the total overhead variance.
| Total overhead variance | $enter the total overhead variance in dollars | select an option Neither favorable nor unfavorableFavorableUnfavorable |
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