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    silsilajan's Avatar
    silsilajan Posts: 5, Reputation: 1
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    #1

    Dec 6, 2012, 09:32 PM
    What is the overhead variance
    I have a question please help me with this.
    Budgeted production 10,000 units
    Actual production 15,000 units
    Budgeted overhead cost $60,000
    What is the overhead variance? Is it favorable or unfacorable?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Dec 6, 2012, 09:45 PM
    It isn't a question of favourable or unfavourable because you have nothing to compare it to. All you have is a variation in the number of units of production. We don't know if the overhead is variable or fixed or mixed so we cannot calculate a variance. If it entirely variable there is no variance. Read the book.

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