Question
1. Lewis Company has budgeted direct labor hours of 576,000 hours. The total budgeted variable overhead is $2,304,000 and the total budgeted fixed overhead is
1.
Lewis Company has budgeted direct labor hours of 576,000 hours. The total budgeted variable overhead is $2,304,000 and the total budgeted fixed overhead is $864,000. The actual results for the year are as follows:
| Actual Direct labor: | 570,000 hours |
| Actual Variable overhead: | $2,320,000 |
| Actual Fixed overhead: | $872,000 |
Refer to Figure 11-4. Calculate the fixed overhead spending variance.
| a. | $32,000 F | |
| b. | $0 | |
| c. | $8,000 U | |
| d. | $32,000 U
|
2. Lewis Company has budgeted direct labor hours of 576,000 hours. The total budgeted variable overhead is $2,304,000 and the total budgeted fixed overhead is $864,000. The actual results for the year are as follows:
| Actual Direct labor: | 570,000 hours |
| Actual Variable overhead: | $2,320,000 |
| Actual Fixed overhead: | $872,000 |
Refer to Figure 11-4. Calculate the variable overhead spending variance. Remember that AVOR = Actual VOH/actual hours, and SVOR = standard (budgeted) VOH/Budgeted hours.
| a. | $40,000 U | |
| b. | $24,000 U | |
| c. | $24,000 F | |
| d. | $40,000 F |
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