Calculate the total overhead variance

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Reference no: EM133184715

Question - Ana Carillo and Associates is a medium-sized company located near a large metropolitan area in the Midwest. The company manufactures cabinets of mahogany, oak, and other fine woods for use in expensive homes, restaurants, and hotels. Although some of the work is custom, many of the cabinets are a standard size.

One such non-custom model is called Luxury Base Frame. Normal production is 1,000 units. Each unit has a direct labor hour standard of 5 hours. Overhead is applied to production based on standard direct labor hours. During the most recent month, only 790 units were produced; 4,500 direct labor hours were allowed for standard production, but only 4,000 hours were used. Standard and actual overhead costs were as follows.

 

Standard
(1,000 units)

Actual
(790 units)

Indirect materials

$  10,700

$  11,000

Indirect labor

38,400

45,500

(Fixed) Manufacturing supervisors salaries

20,100

19,600

(Fixed) Manufacturing office employees salaries

11,600

11,200

(Fixed) Engineering costs

24,100

22,300

Computer costs

8,900

8,900

Electricity

2,200

2,200

(Fixed) Manufacturing building depreciation

7,100

7,100

(Fixed) Machinery depreciation

2,700

2,700

(Fixed) Trucks and forklift depreciation

1,300

1,300

Small tools

600

1,300

(Fixed) Insurance

500

500

(Fixed) Property taxes

300

300

  Total

$128,500

$133,900

Required - Calculate the total overhead variance, controllable variance, and volume variance.

Reference no: EM133184715

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