Standish Company manufactures consumer products and provided the following information for the month of February: Units produced
Question:
Standish Company manufactures consumer products and provided the following information for the month of February:
Units produced | 131,400 |
Standard direct labor hours per unit | 0.2 |
Standard variable overhead rate (per direct labor hour) | $3.40 |
Actual variable overhead costs | $88,700 |
Actual hours worked | 26,550 |
Required:
1. Calculate the variable overhead spending variance using the formula approach. (If you compute the actual variable overhead rate, carry your computations out to five significant digits and round the variance to the nearest dollar.) $
Favorable or Unfavorable
2. Calculate the variable overhead efficiency variance using the formula approach. $
Favorable or Unfavorable
3. What if 26,400 direct labor hours were actually worked in February? What impact would that have had on the variable overhead spending variance? The variable overhead spending variance
would be larger or would be smaller or would not be impacted
Favorable or Unfavorable
What impact would that have had on the variable overhead efficiency variance? The variable overhead efficiency variance
would be larger or would be smaller or would not be impacted
Favorable or Unfavorable
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen