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OH variances The manager of the Texas Department of Transportation has determined that it typically takes 30 minutes for the department's employees to register a
OH variances The manager of the Texas Department of Transportation has determined that it typically takes 30 minutes for the department's employees to register a new car. In Bexar County, the predetermined fixed overhead rate was computed on an estimated 24,000 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, 45,120 cars were registered in Bexar County, and 22,800 direct labor hours were worked in registering those vehicles. For the month, variable overhead was $66,480 and fixed overhead was $217,920. 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 0 0 = $ VOH Efficiency Variance Budgeted VOH - Applied VOH - VOH Efficiency Variance 0 $ 0 = $ FOH Spending Variance Actual FOH Budgeted FOH $ 0 Budgeted FOH S FOH Spending Variance 0 FOH Volume Variance Applied FOH FOH Volume Variance 0 0 b. Compute overhead variances using a three-variance approach. b. Compute overhead variances using a three-variance approach. Actual OH OH Spending Variance Budget at Actual = OH Spending Variance 0-S 0 = $ 0 OH Efficiency Variance Budget at Standard = OH Efficiency Variance Budget at Actual $ $ 0- 0 Budget at Standard $ Volume Variance Applied OH Volume Variance 0 c. Compute overhead variances using a two-variance approach. Budget Variance Actual OH Budgeted OH Budget Variance 0-S 0 = 0 Budgeted OH $ Volume Variance Applied OH = Volume Variance 0 $ 0 = $
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