[The following information applies to the questions displayed below.] Mosaic Com

Question

[The following information applies to the questions displayed below.]

Mosaic Company applies overhead using machine hours and reports the following information.

Compute the variable overhead spending variance, the variable overhead efficiency variance, and total variable overhead cost variance.
  

Actual machine hours used (AH) 5,000 hours Standard machine hours (for actual production) (SH) 5,450 hours Actual variable overhead rate per hour (AVR) $ 4.25 Standard variable overhead rate per hour (SVR) $ 4.10

Explanation / Answer

Variable overhead spending variance = (Standard rate-actual rate)actual hours

= (4.10-4.25)5000

Variable overhead spending variance = 750 Unfavourable

Variable overhead efficiency variance = (Standard hour-actual hour)standard rate

= (5450-5000)4.10

Variable overhead efficiency variance = 1845 Favourable

Variable overhead cost variance = Standard cost-actual cost

= (5450*4.10)-(5000*4.25)

Variable overhead cost variance = 1095 Favourable

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

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