Refer to the information from Exercise 23-27. Compute the following. 1. Variable overhead spending and efficiency variances.
Question:
Refer to the information from Exercise 23-27. Compute the following.
1. Variable overhead spending and efficiency variances.
2. Fixed overhead spending and volume variances.
3. Controllable variance.
Data From Exercise 23-27
Sedona Company set the following standard costs for one unit of its product for this year.
The $5.60 ($4.00 + $1.60) total overhead rate per direct labor hour (DLH) is based on a predicted activity level of 37,500 units, which is 75% of the factory’s capacity of 50,000 units per month. The following monthly flexible budget information is available.
During the current month, the company operated at 70% of capacity, direct labor of 340,000 hours were used, and the following actual overhead costs were incurred.
1. Compute the total variable overhead variance, and identify it as favorable or unfavorable.
2. Compute the total fixed overhead variance, and identify it as favorable or unfavorable.
Step by Step Answer:
Variable overhead spending and efficiency variances Actual variable overhead cost 1375000 Actual dir...View the full answer
