Exercise 8-6 Variable Overhead Variances [LO6]

Order Up, Inc., 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 Order Up, 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, 110,000 items were shipped to customers using 5,400 direct labor-hours. The company incurred a total of $15,930 in variable overhead costs.

According to the company