value 10.00 points Logistics Solutions provides order fulfillment services for d

Question

value 10.00 points Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer The company uses a predetermined variable overhead rate based on direct labor- hours In the most recent month, 160,000 items were shipped to customers using 6,500 direct labor hours. The company incurred a total of $20,800 in variable overhead costs According to the company's standards, 0 03 direct labor-hours are required to fulil an order for one item and the variable overhead rate is $3 25 per direct labor-hour

Explanation / Answer

1) Schdule :

B) Variable overhead rate variance = (3.25*6500-20800) = 325 F

Variable overhead efficiency variance = (160000*.03-6500)*3.25 = 5525 U

No of items shipped 160000 Labour hour per item 0.03 Standard hours allowed 4800 Rate per hour 3.25 Standard Variable overhead cost 15600 Actual variable overhead cost 20800 Standard variable overhead cost 15600 Total variable overhead variance 5200 U

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