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 Budgeted VOH = VOH Spending Variance Actual VOH 66,480 $ 72,000 x = $ 5,520 x F VOH Efficiency Variance Budgeted VOH - Applied VOH 72,000 x $ VOH Efficiency Variance 68,400 x = $ 3,600 x U FOH Spending Variance Actual FOH 217,920 Budgeted FOH FOH Spending Variance 216,000 1,920 U FOH Volume Variance Budgeted FOH $ 216,000 Applied FOH = FOH Volume Variance $ 205,200 x = $ 10,800 x U b. Compute overhead variances using a three-variance approach. Actual OH 284,400 OH Spending Variance Budget at Actual = OH Spending Variance 299,368 x = $ 10,800 x Neither For U OH Efficiency Variance Budget at Actual 299,368 x Budget at Standard = OH Efficiency Variance 288,000 x = $ 11,368 x U Volume Variance Budget at Standard - Applied OH Volume Variance $ 288,000 x $273,600 x = $ 14,400 x U c. Compute overhead variances using a two-variance approach. Budget Variance Actual OH 284,400 Budgeted OH = Budget Variance 288,000 x = $ 3,600 x U Volume Variance Budgeted OH 288,000 x $ Applied OH 273,600 x = $ = Volume Variance 14,400 x U