The total variance is $25,000. The total materials variance is $10,000. The total labor variance is twice the total overhead variance. What is the total overhead variance?
A) $2,500
B) $5,000
C) $7,500
D) $10,000

Question

Quizplus · Accepted Answer

Let the total overhead variance be x.
We know that: 
Total Variance = Total Materials Variance + Total Labor Variance + Total Overhead Variance
25,000 = 10,000 + Total Labor Variance + x
Total Labor Variance = (25,000 - 10,000 - x)
Also, we are given that: 
Total Labor Variance = 2(Total Overhead Variance)
(25,000 - 10,000 - x) = 2x
Solving for x, we get:
x = $5,000

The Total Variance Is $25,000