Question 1:

Highfill Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card for product D80D specifies 6.2 direct labor-hours per unit of D80D. The standard variable overhead rate is $6.40 per direct labor-hour. During the most recent month, 1,400 units of product D80D were made and 8,800 direct labor-hours were worked.

The actual variable overhead incurred was $58,600.

Required:

a. What was the variable overhead rate variance for the month?

b. What was the variable overhead efficiency variance for the month?

Question 2:

Bondi Corporation makes automotive engines. For the most recent month, budgeted production was 3,300 engines. The standard power cost is $2.40 per machine-hour. The company's standards indicate that each engine requires 11.1 machine-hours. Actual production was 3,600 engines. Actual machine-hours were 38,160 machine-hours. Actual power cost totaled $95,282.

Required:

Determine the rate and efficiency variances for the variable overhead item power cost and indicate whether those variances are unfavorable or favorable.

a. Variable overhead rate variance b. Variable overhead efficiency variance a. Variable overhead rate variance b. Variable overhead efficiency variance