Logistics Solutions provides order fulfillment services for dot.com merchantsThe company maintains warehouses that stock items carried by its dot.com clientsWhen a client receives an order from a customerthe order is forwarded to Logistics Solutionswhich pulls the item from storagepacks itand ships it to the customerThe company uses a predetermined variable overhead rate based on direct labor-hours.

In the most recent month160,000 items were shipped to customers using 6,500 direct labor-hoursThe company incurred a total of

$20,800 in variable overhead costs

According to the company's standards0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.25 per direct labor-hour

ences

Required:

1What is the standard labor-hours allowed (SH) to ship 160,000 items to customers?

2What is the standard variable overhead cost allowed (SH SR) to ship 160,000 items to customers?

3What is the variable overhead spending variance?

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

Exercise 9.6 (Algo) Variable Overhead Variances [LO9.6] Logistics Solutions provides order fulfilment 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 cystomer. The company uses a predetermined variable overhead rate based on direct labor-hours In the most recent month, 160,000 items were shipped to customers using 6,500 direct labor-hours. The company incurred a total of $20,800 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $325 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) fo ship 160,000 items to customers? 2. What is the standard variable overhead cost allowed (SH SR) to ship 160,000 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? (For requirements 3 and 4 , indicate the effect of eoch variance by selecting "F" for fovorable, "U" for unfovorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive volues. Do not round intermediate colculations.) 2. What is the standard variable overhead cost allowed ( SHSR ) to ship 160,000 items to custom 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficiency variance? (For requirements 3 and 4 , indicate the effect of each variance by selecting "F" for fovorable, no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate c