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?

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