OH variances The manager of the Texas Department of Transportation has determined that it typically takes 30 minutes for the departments employees to register a new car. In Bexar County, the predetermined fixed overhead rate was computed on an estimated 30,000 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, 56,400 cars were registered in Bexar County, and 28,500 direct labor hours were worked in registering those vehicles. For the month, variable overhead was $83,100 and fixed overhead was $272,400. Note: In answering the following questions, do not use negative signs with your answers.

a. Compute overhead variances using a four-variance approach.

VOH Spending Variance
Actual VOH	-	Budgeted VOH	=	VOH Spending Variance
Answer	-	Answer	=	Answer	AnswerFUNeither F or U

VOH Efficiency Variance
Budgeted VOH	-	Applied VOH	=	VOH Efficiency Variance
Answer	-	Answer	=	Answer	AnswerFUNeither F or U

FOH Spending Variance
Actual FOH	-	Budgeted FOH	=	FOH Spending Variance
Answer	-	Answer	=	Answer	AnswerFUNeither F or U

FOH Volume Variance
Budgeted FOH	-	Applied FOH	=	FOH Volume Variance
Answer	-	Answer	=	Answer	AnswerFUNeither F or U

b. Compute overhead variances using a three-variance approach.

OH Spending Variance
Actual OH	-	Budget at Actual	=	OH Spending Variance
Answer	-	Answer	=	Answer	AnswerFUNeither F or U

OH Efficiency Variance
Budget at Actual	-	Budget at Standard	=	OH Efficiency Variance
Answer	-	Answer	=	Answer	AnswerFUNeither F or U

Volume Variance
Budget at Standard	-	Applied OH	=	Volume Variance
Answer	-	Answer	=	Answer	AnswerFUNeither F or U

c. Compute overhead variances using a two-variance approach.

Budget Variance
Actual OH	-	Budgeted OH	=	Budget Variance
Answer	-	Answer	=	Answer	AnswerFUNeither F or U

Volume Variance
Budgeted OH	-	Applied OH	=	Volume Variance
Answer	-	Answer	=	Answer	AnswerFUNeither F or U

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