Problem
JM Company uses standard costing. The company reported the following information for the current period:
Actual overhead incurred $15,000 of which $5,000 is fixed
Budgeted fixed overhead $4,800
Variable overhead rate per machine hour $5.00
Standard machine hours allowed for production 1,950
Actual machine hours used 2,200
Calculate the following variances:
1) Variable overhead price variance
2) Variable overhead efficiency variance
3) Total variable overhead variance
4) Total fixed overhead variance.