Exercise $10-3($Algo$)$ Variable Overhead Variances $[$LO$10-3]$

Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it$,$ and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor$-$hours.

In the most recent month, $165,000$ items were shipped to customers using $6,800$ direct labor$-$hours. The company incurred a total of $$22,100$ in variable overhead costs.

According to the company$$s standards, $0\mathrm{.}04$ direct labor$-$hours are required to fulfill an order for one item and the variable overhead rate is $$3\mathrm{.}30$ per direct labor$-$hour.

Required:

$1.$ What is the standard labor$-$hours allowed $($SH$)$ to ship $165,000$ items to customers?

$2.$ What is the standard variable overhead cost allowed $($SH $\backslash$times SR$)$ to ship $165,000$ items to customers?

$3.$ What is the variable overhead spending variance?

$4.$ What is the variable overhead rate variance and the variable overhead efficiency variance?