Question 23 Jackson Company’s overhead rate was based on estimates of $192,000 for overhead costs and 19,200 direct labour hours. Jackson’s standards…

Question 23

Jackson Company’s overhead rate was based on estimates of $192,000 for overhead costs and 19,200 direct labour hours. Jackson’s standards allow 2 hours of direct labour per unit produced. Production in May was 880 units, and actual overhead incurred in May was $19,000. The overhead budgeted for 1,760 standard direct labour hours is $17,120 ($4,800 fixed and $12,320 variable).

(a)

Calculate the total, budget, and volume variances for overhead.

Total overhead variance$

Unfavourable

Favourable

Neither favourable nor unfavourable

Overhead budget variance$

Unfavourable

Neither favourable nor unfavourable

Favourable

Overhead volume variance$

Unfavourable

Neither favourable nor unfavourable

Favourable