Total overhead variance
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The predetermined overhead rate for Weed-B-Gone is $10, comprised of a variable overhead rate of $6 and a fixed rate of $4. The amount of budgeted overhead costs at normal capacity of $300,000 was divided by normal capacity of 30,000 direct labor hours, to arrive at the predetermined overhead rate of $10. Actual overhead for June was $17,800 variable and $10,800 fixed, and 1,500 units were produced. The direct labor standard is 2 hours per unit produced. The total overhead variance is
$3,600 F.
$1,400 F.
$1,400 U.
$3,600 U.
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The solution explains the calculation of total overhead variance
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Total overhead variance = Actual overhead - Applied overhead
Actual overhead = ...
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