Standish Company manufactures consumer products and provided the following information for the month of February: Units produced 131,000 Standard direct labor hours per unit 0.20 Standard variable overhead rate (per direct labor hour) $3.40 Actual variable overhead costs $88,670 Actual hours worked 26,350 Requirement: 1. Calculate the total variable overhead variance. 2. What if actual production had been 129,600 units? How would that affect the total variable overhead variance? Indicate what the new variance would be below.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 10EB: A manufacturer planned to use $45 of variable overhead per unit produced, but in the most recent...
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Standish Company manufactures consumer products and provided the following information for the month of February:

Units produced 131,000
Standard direct labor hours per unit 0.20
Standard variable overhead rate (per direct labor hour) $3.40
Actual variable overhead costs $88,670
Actual hours worked 26,350

Requirement:

1. Calculate the total variable overhead variance.

2. What if actual production had been 129,600 units? How would that affect the total variable overhead variance? Indicate what the new variance would be below.

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