Math Snap

STEP 1

1. Actual direct labor hours: 21,000 hours.
2. Actual manufacturing overhead costs: $118,000.
3. Standard hours allowed: 20,600 hours.
4. Predetermined overhead rate: $6 per direct labor hour.
5. Total overhead variance is calculated as the difference between actual overhead costs and applied overhead costs.

STEP 2

1. Calculate the applied overhead costs.
2. Compute the total overhead variance.

STEP 3

Calculate the applied overhead costs using the standard hours allowed and the predetermined overhead rate.
$$\text{Applied Overhead Costs} = \text{Standard Hours Allowed} \times \text{Predetermined Overhead Rate}$$ $$\text{Applied Overhead Costs} = 20,600 \, \text{hours} \times \$6/\text{hour}$$ $$\text{Applied Overhead Costs} = \$123,600$$

Compute the total overhead variance by subtracting the applied overhead costs from the actual overhead costs.
$$\text{Total Overhead Variance} = \text{Actual Overhead Costs} - \text{Applied Overhead Costs}$$ $$\text{Total Overhead Variance} = \$118,000 - \$123,600$$ $$\text{Total Overhead Variance} = -\$5,600$$ The total overhead variance is:
$$\boxed{-\$5,600}$$