Posted: February 25th, 2021

E23-20 review the data from great fender given in exercise e23-19.

E23-20 Computing overhead variances


E23-20 Review the data from Great Fender given in Exercise E23-19. Consider the following additional information

Static budget variable overhead $ 5,500

Static budget fixed overhead $ 22,000

Static budget direct labor hours 550 hours

Static budget number of units 22,000 units


Great Fender allocates manufacturing overhead to production based on standard direct labor hours. Great Fender reported the following actual results for 2014:

actual variable overhead, $4,950; actual fixed overhead, $23,000.



1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.


2. Explain why the variances are favorable or unfavorable

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