A Company makes a single product and uses a standard costing system that applies

Question

A Company makes a single product and uses a standard costing system that applies overhead on the basis of direct labor hours. They recently used 2,000 labor hours to produce 400 units. Their static budget indicated expectations of 500 units, 2,000 DLH and $60,000 in variable overhead. Actual VOH totaled $40,000. What was the variable overhead spending variance? Please indicate favorable variances with an "f" and unfavorable variances with a "u" A Company makes a single product and uses a standard costing system that applies overhead on the basis of direct labor hours. They recently used 2,000 labor hours to produce 300 units. Their static budget indicated expectations of 500 units, 3,000 DLH and $70,000 in variable overhead. Actual VOH totaled $40,000. What was the variable overhead efficiency variance? Please indicate favorable variances with an "f" and unfavorable variances with a "u

Explanation / Answer

Standard variable overhead rate per unit = 60000/500= 120 Variable overhead efficiency variance = 40000-(400*120)= 8000 Favorable 2 Standard variable overhead hours per unit = 3000/500 = 6 Standard variable overhead rate per hour=70000/3000= Variable overhead efficiency variance = 23.33*(2000-300*6)= 4667 Unfavorable (Rounded off)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

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