The total variance is $10,000 favourable.The total materials variance is $4,000 favourable.The total labour variance is twice the total overhead variance, both which are favourable.What is the total overhead variance?
A)$1,000
B)$2,000
C)$3,000
D)$4,000

Question

Quizplus · Accepted Answer

Let the total overhead variance be x.
Then, we have:
Total Variance = Materials Variance + Labour Variance + Overhead Variance
$10,000 = $4,000 + Labour Variance + x
Labour Variance = $3,000 (since the labour variance is twice the overhead variance)
Substituting in the equation above:
$10,000 = $4,000 + $3,000 + x
x = $3,000
Therefore, the total overhead variance is $3,000, which corresponds to choice (B).

The Total Variance Is $10,000 Favourable