Problem E: The standard amount of output for the Chicago plant of Worldworth Company is 50,000 units per month Overhead is applied based on units produced. The udget of the month for manufacturing overhead allows $180,000 for fixed overhead and $4.80 per unit of output for variable overhead. Actual overhead for the month consisted $181.440 of fixed overhead, the actual variable overhead is listed below in the requirements Requirement 1: Compute the Variable Overhead Spending Variance, the Variable Overhead Efficiency Variance and the Total Overhead Variance and the Total Fixed Overhead ariance. Also indicate whether the variances are Favorable or Unfavorable Requirement 2: Compute the variances mentioned in requirement 1 assuming the following actual production in units and actual variable overhead in dollars a) 37,500 production in units and $182,400 actual variable overhead b) 55.000 production in units and $270,480 actual variable overhead AQ SH AR SR Actual Quantity in Units Standard Quantity in Units Actual Rate per unit Standard Rate per unit (AR-Actual Variable Overhead/Actual Production in units) -) Overhead based on 37,500 production units and $182,400 actual variable overhead Variable Overhead Spending Variance (Actual Quantity Actual Rate) - (Actual Quantity Standard Rate) AQ AR SR AQ 1.500 per unit O per unit BADO 180.000 Variable Overhead Spending Variance 2400 Make sure all variance amounts are Variable Overhead Efficiency Variances Actual Quantity Standard Rate) (Standard Quantity x Standard Rate) AQ SR so SR 4 per un per unit Variable Qvathaad Eticiency Variance Make sure all variance amounts are AC so SR per unit per unit Variable Overhead Emclancy Variances Favorable (Make sure all variance amounts Total Variable Overhead Variance. Variable Overhead Spending Variance + or Variable Overhead Efficiency Variance (Hint: both Variances are favorable or Unfavorable then you add them together and the Total Variance will be favorable or Unfavorable) tone is Tavorable and the other is unfavorable you will subtract the 2 and the Total Variance will take on the favorable or Unfavorable trait of the largest variance) Variable Overhead Spending Variance Variable Overhead Efficiency Variance Total Variable Overhead Variance Untavorable Favorable Favorable Make sure all variance amounts Total Fixed Overhead Variances Actual Fixed Overhead - Budgeted Fixed Overhead Actual Fixed Overhead Given Budgeted Fixed Overhead Given) Total Fixed Overhead Variance = Unfort Make sure all variance amounts b) Overhead based on 55,000 production units and $270,480 actual variable overhead Variable Overhead Spending Variance (Actual Quantity Actual Rate) - (Actual Quantity Standard Rate) AQ AR AQ SR 4.00 per unit per unit Variable Overhead Spending Variance Make sure all variance amounts Variable Overhead Efficiency Variance Actual Quantity x Standard Rate) Standard Quantity Standard Rate) AQ SR 5Q SR per unit per und Variable Overhead Emiciency Variance Unfavorable Make sure all variance amounts Total Variable Overhead Variancee Variable Overhead Spending Variance.or-Variable Overhead Efficiency Variance Punt both Varlances are favorable or Unfavorable then you add them together and the Total Variance will be avorable or Unfavorable. it one is favorable and the other Unfavorable you will subtract the 2 and the Total Variance will take on the favorable or Unfavorable trait of the largest variance) Variable Overhead Spending Variance - Variable Othead Efficiency Variances Total Variable Overhead Variance Lintavot Make sure all variance amounts
