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E 1 1 . 2 5 Overhead variances: manufacturer LO 1 1 . 5 Able Control Ltd , a manufacturer of electrical safety switches, uses
E
Overhead variances: manufacturer LO
Able Control Ltd a manufacturer of electrical safety switches, uses a standard costing system. The standard manufacturing overhead costs per switch are based on direct labour hours and are as follows:
Variable overhead hours @ $ per hour
$
Fixed overhead hours @ $ per hour
Total overhead
$
Based on capacity of direct labour hours per month.
The following information is available for October:
switches were produced, although switches were budgeted.
direct labour hours were worked at a total cost of $
Variable overhead costs were $
Fixed overhead costs were $
Required
Calculate the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances for October. Indicate whether each variance is favourable or unfavourable.
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