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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
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 4,000 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, 7,520 cars were registered in Bexar County, and 3,800 direct labor hours were worked in registering those vehicles. For the month, variable overhead was $11,080 and fixed overhead was $36,320. 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 $ Budgeted VOH $ Actual FOH $ Budgeted FOH $ $ $ VOH Efficiency Variance Applied VOH = VOH Efficiency Variance $ $ FOH Spending Variance Budgeted FOH = FOH Spending Variance $ FOH Volume Variance Applied FOH = FOH Volume Variance $ b. Compute overhead variances using a three-variance approach. OH Spending Variance Actual OH Budget at Actual OH Spending Variance
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