Calculating the Total Overhead Variance

Standish Company manufactures consumer products and provided the following information for the month of February:

Units produced

Standard direct labor hours per unit

$131,000$

Standard variable overhead rate $($per direct labor hour$)$

$0\mathrm{.}20$

Actual variable overhead costs

$$3\mathrm{.}40$

$$88,670$

Actual hours worked

$26,350$

Required:

Calculate the total variable overhead variance.

What if actual production had been $129,600$ units? How would that affect the total variable overhead variance? Indicate what the new variance would be below.

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