Question
H&X Co. uses a standard job cost system with a normal capacity of 24,900 direct labour hours. H&X Co. produces 12,000 units, which cost $158,900
H&X Co. uses a standard job cost system with a normal capacity of 24,900 direct labour hours. H&X Co. produces 12,000 units, which cost $158,900 for direct labour (22,700 hours), $27,120 for variable overhead, and $130,800 for fixed overhead. The standard variable overhead per unit is $2 (2 hours at $1 per hour), and the standard fixed overhead per unit is $10.10 (2 hours at $5.05 per hour). Calculate the variable overhead spending variance and the variable overhead efficiency variance.
Variable overhead spending variance | $ | FavourableUnfavourableNeither favourable nor unfavourable | |||
Variable overhead efficiency variance | $ | UnfavourableNeither favourable nor unfavourableFavourable |
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