# Stevens Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—1 pound plastic at $7.00 per pound$ 7.00 Direct labor—1.6 hours at $12.00 per hour 19.20 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 4.00 Total standard cost per unit$42.20 The predetermined manufacturing overhead rate is $10.00 per direct labor hour ($16.00 ÷ 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $60,000 ($7.50 per hour) and total fixed overhead costs of $20,000 ($2.50 per hour). Actual costs for October in producing 4,800 units were as follows. Direct materials (5,100 pounds)   $36,720 Direct labor (7,400 hours) 92,500 Variable overhead 59,700 Fixed overhead 21,000 Total manufacturing costs$209,920 The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. What is the total overhead variance?

Question

Stevens Corporation manufactures a single product. The standard cost per unit of product is shown below.

 Direct materials—1 pound plastic at $7.00 per pound$ 7.00 Direct labor—1.6 hours at $12.00 per hour 19.20 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 4.00 Total standard cost per unit$42.20

The predetermined manufacturing overhead rate is $10.00 per direct labor hour ($16.00 ÷ 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $60,000 ($7.50 per hour) and total fixed overhead costs of $20,000 ($2.50 per hour). Actual costs for October in producing 4,800 units were as follows.

 Direct materials (5,100 pounds) $36,720 Direct labor (7,400 hours) 92,500 Variable overhead 59,700 Fixed overhead 21,000 Total manufacturing costs$209,920

The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

What is the total overhead variance?

## Expert Answer

See Answer

### Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Answer
*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.
Tagged in
BusinessAccounting