Question
Jackson Company's overhead rate was based on estimates of $199,200 for overhead costs and 19,920 direct labour hours. Jackson's standards allow 2 hours of direct
Jackson Company's overhead rate was based on estimates of $199,200 for overhead costs and 19,920 direct labour hours. Jackson's standards allow 2 hours of direct labour per unit produced. Production in May was 920 units, and actual overhead incurred in May was $19,000. The overhead budgeted for 1,840 standard direct labour hours is $17,860 ($4,980 fixed and $12,880 variable).
(a)Calculate the total, budget, and volume variances for overhead.
Total overhead variance$
Unfavourable
Neither favourable nor unfavourable
Favourable
Overhead budget variance$
Favourable
Neither favourable nor unfavourable
Unfavourable
Overhead volume variance$
Favourable
Unfavourable
Neither favourable nor unfavourable
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