Compute earth company s total overhead varianc

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Computation of total overhead rate and total overhead variance Earth Company expects to operate at 80% of its productive capacity of 25,000 units per month. At this planned level, the company expects to use 40,000 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate based on direct labor hours. At the 80% capacity level, the total budgeted cost includes $40,000 fixed overhead cost and $280,000 variable overhead cost. In the current month, the company incurred $340,000 actual overhead and 39,000 actual labor hours while producing 19,500 units. 1. Compute Earth Company s overhead application rate for total overhead. 2. Compute Earth Company s total overhead varianc.

Reference no: EM13123456

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