Sigorny Company uses standard costing and applies overhead on the basis of units produced.The company provided the following for July: $$\begin{array} { l r }
\text { Predetermined overhead rate per unit produced } & \$ 6.20 \
\text { Budgeted fixed overhead } & \$ 12,600 \
\text { Variable overhead budgeted per unit } & \$ 2.00 \
\text { Actual units produced } & 3,100
\end{array}$$ If the controllable overhead variance was $920 favorable in July, how much were total actual overhead costs?
A)$17,880
B)$18,800
C)$19,220
D)$19,720

Question

Sigorny Company uses standard costing and applies overhead on the basis of units produced.The company provided the following for July: $$\begin{array} { l r } 
\text { Predetermined overhead rate per unit produced } & \$ 6.20 \
\text { Budgeted fixed overhead } & \$ 12,600 \
\text { Variable overhead budgeted per unit } & \$ 2.00 \
\text { Actual units produced } & 3,100
\end{array}$$ If the controllable overhead variance was $920 favorable in July, how much were total actual overhead costs?
A)$17,880
B)$18,800
C)$19,220
D)$19,720

Quizplus · Accepted Answer

The total standard overhead cost for 3,100 units is $19,220 (3,100 units x $6.20). With a $920 favorable variance, actual overhead costs were $19,220 - $920 = $18,300.

Sigorny Company Uses Standard Costing and Applies Overhead on the Basis