Exercise 7-28 OH variances eBook Learning Objective 2 The manager of the Texas Department of Transportation has determined that it typically takes 30 minutes for the department's employees to register a new car. In Bexar County, the predetermined fixed overhead rate was computed on an estimated 10,000 direct labor hours per month and is $9 per direct labor hour, whereas the predetermined variable overhead rate is $3 per direct labor hour. During July, 18,800 cars were registered in Bexar County and 9,500 direct labor hours were worked in registering those vehicles. For the month, variable overhead was $27,700 and fixed overhead was $90,800. a. Compute overhead variances using a four-variance approach. VOH Spending Variance $ SelectFavorableUnfavorableItem 2 VOH Efficiency Variance $ SelectFavorableUnfavorableItem 4 Total VOH Variance $ SelectFavorableUnfavorableItem 6 FOH Spending Variance $ SelectFavorableUnfavorableItem 8 FOH Volume Variance $ SelectFavorableUnfavorableItem 10 Total FOH Variance $ SelectFavorableUnfavorableItem 12 b. Compute overhead variances using a three-variance approach OH Spending Variance $ OH Efficiency Variance $ SelectFavorableUnfavorableItem 15 OH Volume Variance $ SelectFavorableUnfavorableItem 17 Total OH Variance $ SelectFavorableUnfavorableItem 19 c. Compute overhead variances using a two-variance approach. Budget Variance $ SelectFavorableUnfavorableItem 21 Volume Variance $ SelectFavorableUnfavorableItem 23 Total OH Variance $ SelectFavorableUnfavorableItem 25