3. Shiplt, Inc., provides shipping and warehousing services for local merchants.

Question

3. Shiplt, Inc., provides shipping and warehousing services for local merchants. The company maintains warehouses that stock items and deliver them to the stores or direct to customers. a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 72,000 items were shipped to customers using 6,900 direct labor hours. The company incurred a total of $21,390 in variable overhead costs. According to the company's standards, 0.1 direct labor-hours are required to fulfill an order one item and the variable overhead rate is $3.00 per direct labor-hour. Required What is the standard labor-hours allowed (SH) to ship 72,000 items to customers? What is the standard variable overhead cost allowed (SH x SR) to ship 72,000 items to customers? What is the variable overhead spending variance? What is the variable overhead rate variance and the variable overhead efficiency variance? 1. 2. 3. 4.

Explanation / Answer

1) Standard labour hour allowed = 72000*.10 = 7200 Hour

2) Standard variable overhead cost = 7200*3 = 21600

3) Variable overhead spending variance = 21600-21390 = 210 F

4) Variable overhead rate variance = (3*6900-21390) = 690 U

Variable overhead efficiency variance = (7200-6900*3) = 900 F

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.