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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 8.000 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, 15,040 cars were registered in Bexar County, and 7,600 direct labor hours were worked in registering those vehicles. For the month, variable overhead was $22,160 and fixed overhead was $72,640. 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 $ 0.5 0 - $ 0 FOH Spending Variance Actual FOH. 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 OH Efficiency Variance Budget at Actual - Budget at Standard = OH Efficiency Variance $ 0. $ 0 - $ 0 Volume Variance Budget at Standard - 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 Budgeted OH - Applied OH = Volume Variance $ 0 $ 0 - $ 0
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