Refer to Company Inc. Suppose the actual overhead for January is $51,000. What is the overhead variance?

Question

Quizplus · Accepted Answer

To calculate the overhead variance, we need to compare the actual overhead with the budgeted overhead. If the actual overhead is more than the budgeted overhead, it is overapplied, and if the actual overhead is less than the budgeted overhead, it is underapplied. 
Here, the budgeted overhead is not given, so we cannot calculate the total overhead variance. Hence, we cannot choose options A or C. 
Since the actual overhead is higher than the unspecified budgeted overhead, it is underapplied. Therefore, the correct answer is D, $3,000 underapplied.