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In October, Oriole Company reports 19,000 actual direct labor hours, and it incurs $129,210 of manufacturing overhead costs. Standard hours allowed for the work done is 21,900 hours. The predetermined overhead rate is $5.85 per direct labor hour. Compute the total overhead variance.

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Answer:

The total overhead variance is $1,095

Explanation:

The total standard overhead cost = Standard hours allowed for the work done x predetermined overhead rate = 21,900 x $5.85 = $128,115

The overhead variance = The total standard overhead cost – The actual overhead cost = $129,210 - $128,115 = $1,095

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