Alona Company’s overhead rate was based on estimates of $976,800 for overhead costs and 88,800 direct labor hours. Alona’s standards allow 5 hours of direct labor per unit produced. Production in May was 1,500 units, and actual overhead incurred in May was $83,270. The overhead budgeted for 7,500 standard direct labor hours is $82,170 ($24,420 fixed and $57,750 variable).
Compute the total, controllable, and volume variances for overhead.
Total Overhead Variance:
Overhead Controllable Variance:
Overhead Volume Variance: