Data table

Requirements

Compute the overhead variances for the year: variable overhead

cost variance, variable overhead efficiency variance, fixed overhead

cost variance, and fixed overhead volume variance.

Explain why the variances are favorable or unfavorable.Great Fender uses a standard cost system and provide the following$$ information:

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Great Fender allocates manufacturing overhead to production based on standard direct labor hours. Great Fender reported the following actual results for $2024$: actual number of fenders$$ produced, $20$ comma $000$; actual variable$$ overhead, $ $6$ comma $300$; actual fixed$$ overhead, $ $30$ comma $000$; actual direct labor$$ hours, $430.$

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Part $1$

Requirement $1.$ Compute the overhead variances for the$$ year: variable overhead cost$$ variance, variable overhead efficiency$$ variance, fixed overhead cost$$ variance, and fixed overhead volume variance.

Begin with the variable overhead cost and efficiency variances. Select the required$$ formulas, compute the variable overhead cost and efficiency$$ variances, and identify whether each variance is favorable$($F$)$ or unfavorable$($U$).($You may need to simply the formula based on the data provided. Abbreviations$$ used: AC$=$ actual$$ cost; AQ$=$ actual$$ quantity; FOH$=$ fixed$$ overhead; SC$=$ standard$$ cost; SQ$=$ standard$$ quantity; VOH$=$ variable$$ overhead.$)$

Formula

Variance

VOH cost variance

$=$

$$

$=$

VOH efficiency variance

$=$