Question
Straightforward calculation of overhead variances: manufacturer The data below relate to Sporty Ltd, a manufacturer of exercise equipment, for August: Standard variable overhead rate $27
Straightforward calculation of overhead variances: manufacturer
The data below relate to Sporty Ltd, a manufacturer of exercise equipment, for August:
Standard variable overhead rate $27 per machine hour
Standard quality of machine hour 2 hours per unit of output
Budgeted fixed overhead $270 000
Budgeted output 15 000 units
Actual results for August are as follows:
Actual output 13 500 units
Actual variable overhead $757 350
Actual fixed overhead $274 500
Actual machine time 29 700 machine hours
Required:
Calculate the following variances, indicating whether each variance is favourable or unfavourable:
1. variable overhead spending variance
2. variable overhead efficiency variance
3. fixed overhead budget variance
4. fixed overhead volume variance.
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