24

Rondell Company uses a standard cost system. Indirect costs were budgeted at $180,000 plus $12 per direct labour hour. The overhead rate is based on 10,000 hours. Actual results were:

Standard direct labour hours allowed8,500Actual direct labour hours10,000Fixed overhead$168,000Variable overhead$163,000

Calculate the fixed overhead production volume variance.

Fixed overhead production volume variance$

Favourable

Unfavourable

Neither favourable nor unfavourable

Calculate the variable overhead spending variance.

Variable overhead spending variance

$

Favourable

Unfavourable

Neither favourable nor unfavourable

Calculate the variable overhead efficiency variance.

Variable overhead efficiency variance$

Neither favourable nor unfavourable

Favourable

Unfavourable

Calculate the over- or underapplied overhead.

Overhead$

over-applied

under-applied