8-B3 Variable-Overhead Variances

You have been asked to prepare an analysis of the overhead costs in the order processing department

of a mail-order company like Harriet Carter Corporation. As an initial step, you prepare a summary of some

events that bear on overhead for the most recent period. Variable overhead is applied based on hours of

processing-clerk labor. The standard variable-overhead rate per order was $.06.The rate of 10 orders per

hour is regarded as standard productivity per clerk. The total overhead incurred was $203,600, of which

$135,900 was fixed. The fixed-overhead spending variance was $400 unfavorable. The variable-overhead

flexible-budget variance was $5,600 unfavorable. The variable-overhead spending variance was $3,000

favorable.

Find the following:

1.Variable-overhead efficiency variance

2.Actual hours of input

3.Standard hours of input allowed for output achieves

4.Budgeted-fixed overhead