Question 1

Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2020.

Costs and Production Data		Actual		Standard
Raw materials unit cost		$2.20		$2.00
Raw materials units		11,200		10,300
Direct labor payroll		$175,820		$169,830
Direct labor hours		14,900		15,300
Manufacturing overhead incurred		$202,750
Manufacturing overhead applied				$206,550
Machine hours expected to be used at normal capacity				43,500
Budgeted fixed overhead for June				$65,250
Variable overhead rate per machine hour				$3.00
Fixed overhead rate per machine hour				$1.50

Overhead is applied on the basis of standard machine hours. 3.00 hours of machine time are required for each direct labor hour. The jobs were sold for $489,000. Selling and administrative expenses were $35,800. Assume that the amount of raw materials purchased equaled the amount used.

(a)

Compute the total overhead variance.

Total overhead variance

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