Question
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
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 20,000 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, 37,600 cars were registered in Bexar County, and 19,000 direct labor hours were worked in registering those vehicles. For the month, variable overhead was $55,400 and fixed overhead was $181,600.
a. Compute overhead variances using a four-variance approach. VOH Spending Variance Actual VOH Budgeted VOH = VOH Spending Variance 57,000 - $ 55,400 = $ 1,600 F $ Budgeted VOH $ 0 VOH Efficiency Variance Applied VOH = VOH Efficiency Variance $ 0 = $ 0 A Actual FOH FOH Spending Variance Budgeted FOH = FOH Spending Variance $ 0 = 0 $ 0 FOH Volume Variance Budgeted FOH Applied FOH = FOH Volume Variance $ 0 - $ 0 = $ 0 b. Compute overhead variances using a three-variance approach. OH Spending Variance Actual OH Budget at Actual = OH Spending Variance 0 $ $ 0 = $ 0 Budget at Actual OH Efficiency Variance Budget at Standard = OH Efficiency Variance $ 0 = $ 0 $ 0 Budget at Standard Volume Variance Applied OH = Volume Variance $ 0 = $ 0 $ 0 C. Compute overhead variances using a two-variance approach. Budget Variance Actual OH Budgeted OH Budget Variance 0 0 = $ $ $ 0 Volume Variance Applied OH = Volume Variance Budgeted OH $ 0 $ 0 = $ 0Step by Step Solution
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