Question
Overhead Variances At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Direct materials (4
Overhead Variances
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products:
Direct materials (4 lbs. @ $2.80)$11.20Direct labor (2 hrs. @ $18.00)36.00FOH(2 hrs. @ $5.20)10.40VOH(2 hrs. @ $0.70)1.40Standard cost per unit$59.00Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows:
- Units produced: 79,600
- Direct labor: 158,900 hours at $18.10
- FOH:$831,000
- VOH:$112,400
Required:
1.Compute the variable overhead spending and efficiency variances.
Spending variance$
Efficiency variance$
2.Compute the fixed overhead spending and volume variances.
Spending variances$
Volume variances$
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