Question
FGH Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card for product DDE specifies 7.1 direct labor-hours per unit
FGH Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card for product DDE specifies 7.1 direct labor-hours per unit of DDE. The standard variable overhead rate is $7.40 per direct labor-hour. During the most recent month, 1,100 units of product DDE were made and 7,900 direct labor-hours were worked.
The actual variable overhead incurred was $63,080.
Required:
a. What was the variable overhead spending variance for the month?
b. What was the variable overhead efficiency variance for the month?
(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
a. Variable overhead spending variance b. Variable overhead efficiency variance
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started