Mulliner Company showed the following information for the year:
Standard variable overhead rate (SVOR) per direct labor hour $3.50
Standard hours (SH) allowed per unit 3
Actual production in units 20,000
Actual variable overhead costs $220,500
Actual direct labor hours 61,200
Required:
1. Calculate the standard direct labor hours for actual production.
2. Calculate the applied variable overhead. $
3. Calculate the total variable overhead variance. Enter amounts as positive numbers and select Favorable or Unfavorable.

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aquialaska aquialaska · Answer 1 · 2020-04-02T03:59:22+02:00

Answer:

1. 60,000 hours

2. $210,000

3. $10,500 Unfavorable

Explanation:

1. Standard Hours = 3 per unit

Actual production units = 20,000

Standard Hours for actual production = Standard Hours × Actual production units

= 3 × 20,000

= 60,000 hours

2. Applied variable overhead = Standard hours × Standard Rate per hour

= 60,000 × $3.50

= $210,000

3. Total Variable overhead variance = Applied variable overhead - Actual variable overhead overhead

= $210,000 - $220,500

= $10,500 Unfavorable