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Question 4. Lower Hutt Stationery Company manufactures cardboard folders. The company has developed standard overhead rates based on a monthly capacity of 90000 direct labour
Question 4. Lower Hutt Stationery Company manufactures cardboard folders. The company has developed standard overhead rates based on a monthly capacity of 90000 direct labour hours (DLHs) as follows: Standard costs per unit (one box of folders): Variable overhead (2 hours @ \$6 per DLH) Fixed overhead (2 hours@\$10 per DLH) During April, 45000 units were budgeted for production; however, only 40000 units were produced. The following data relate to April: - Actual direct labour cost incurred was $1567500 for 82500 actual hours of work. - Actual overhead incurred totalled $1371500, of which $511500 was variable and $860000 was fixed. Required: i. Calculate variable overhead spending variance. ii. Calculate variable overhead efficiency variance. iii. Calculate fixed overhead budget variance. iv. Calculate fixed overhead volume variance
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