Seacrest Company’s overhead rate was based on estimates of $240,000 for overhead costs and 24,000 direct labor hours. Seacrest’s standards allow 2 hours of direct labor per unit produced. Production in May was 900 units, and actual overhead incurred in May was $19,500. The overhead budgeted for 1,800 standard direct labor hours is $18,600 ($6,000 fixed and $12,600 variable).

Instructions

a. Compute the total, controllable, and volume variances for overhead.
b. What are the possible causes of the variances computed in part (a)?