. Calculate spending and capacity variances.

Spending Variance =

Actual overhead incurred =

Flexible budget at? Direct labour hours =

Variable overhead (actual DL hours x V recovery rate) =

TOTAL =

Capacity Variance

Flexible budget at actual DL hours =

Applied overhead (actual DL hours x OH recovery rate) =

Capacity Variance =

Info needed for calcs:

Budgeted amounts

Clothing line	Units Sold	Unit Price	Total	cost per unit	Total cost	Gross Profit
Jeans	840.00	81.00	68,040.00	27.00	22,680.00	45,360.00
Tops	2,500.00	60.00	150,000.00	20.00	50,000.00	100,000.00
Dresses	2,200.00	90.00	198,000.00	30.00	66,000.00	132,000.00
Sweaters	1,500.00	108.00	162,000.00	36.00	54,000.00	108,000.00
Apparel	1,500.00	240.00	360,000.00	80.00	120000	240,000.00
Swimwear	1,200.00	120.00	144,000.00	40.00	48,000.00	96,000.00
Accessories	1,000.00	150.00	150,000.00	50.00	50,000.00	100,000.00
Total	10,740.00		1,232,040.00		410680	821,360.00

	Forcast Operating Expenses Budget
Office salaries	166,950.00
Office supplies	12,000.00
Sales salaries	253,050.00
Communications expense	17,250.00
Depreciation expense	54,900.00
Rent expense	60,000.00
Utilities expense	82,800.00
Bank charges	6,050.00
Miscellaneous expenses	19,887.50
	672,887.50

Actual Sales

Sold for the Year

Tops 2,712

Dresses 2,289

Sweaters 1,361

Apparel 1,607

Swimwear 1,185

Actual Expenses were

Office salaries $ 164,300.00

Office supplies 14,900.00

Sales salaries 251,000.00

Communications expense 18,600.00

Depreciation expense 54,900.00

Rent expense 60,000.00

Utility expense 86,180.00

Bank charges 6,900.00

Miscellaneous expenses 21,491.00

Total operating expenses $ 678,271.00

Accessories 980

Jeans 850

Additional info:

Direct labour hours are used as the basis for recovery

. Each pair of jeans takes 45 minutes to complete.

9,600 jeans were produced

. Actual overhead incurred totalled $68,041.60

. Actual direct labour hours: 7,280.