price, quantity, and volume effeets An organization has an overhead LLA of OV = 100,000 + 25DLH,
Question:
price, quantity, and volume effeets An organization has an overhead LLA of OV = 100,000 + 25DLH, where DLH denotes direet labor hours. It is also able to identify the underlying costs and separately aggregate those associated with the LLA's intercept (orthe "fixed" eost)
in one account and those associated with the slope (orthe "variabIe" cost) in another account. During areeent period the "fixed" overhead totaled 95,000 and the
"varlable" overhead totaled 122,000. 5,100 direct labor hours were used, but given the work accomplished the underlying standards show 4,800 hours should have been used. Full, standard costing is used, with a norma 1 volume of 5,000 direct labor hours.
Prepare a list of varianees for both aecounts. Why is there no volume varlanee for the "varlable" overhead eategory? Why is there no· quantity varlanee for the
"fixed" overhead category?
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