Elements of Labor and Variable Overhead Variances

Chelsea Fabricating applies variable overhead to products on the basis of standard direct labor hours.

Presented is selected information for last month when 10,000 units were produced

Direct labor Variable overhead

Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a. f.

Standard hours/unit . . . . . . . . . . . . . . . . . . . . . . . . b. b.

Actual hours (total) . . . . . . . . . . . . . . . . . . . . . . . . . 6,300 6,300

Standard rate/hour . . . . . . . . . . . . . . . . . . . . . . . . . $36.00 $24.00

Actual rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $37.80

Flexible budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . $90,000 $60,000

Labor rate or variable overhead spending variance c. g.

Efficiency variances . . . . . . . . . . . . . . . . . . . . . . . . d. h.

Total flexible budget variance. . . . . . . . . . . . . . . . . e. $3,000 F

Required

Solve for items a through h