The total variance is $35000. The total materials variance is $14000. The total labor variance is twice the total overhead variance. What is the total overhead variance?
A) $3500
B) $7000
C) $10500
D) $14000

Question

Quizplus · Accepted Answer

Let OHV be the total overhead variance.

Total Variance = Materials Variance + Labor Variance + OHV 
$35000 = $14000 + Labor Variance + OHV

Given that Labor Variance = 2 OHV

Substituting, 
$35000 = $14000 + (2 OHV) + OHV 
$21000 = 3 OHV 
OHV = $7000

Therefore, the answer is B, $7000.

The Total Variance Is $35000