Tech Company produces computer servers.

The companys standards show each server will require 10 hours of direct labor at $20 per hour.

Techs direct labor workforce worked 3,200 hours to produce 300 units during the month of August and was paid $22 per direct labor hour.

Variable overhead is allocated to each server based on a standard of $100 per machine hour and 3 machine hours per server.

A total of 850 machine hours were used during the month of August and variable overhead costs totaled $96,000.

Calculate the variable overhead spending variance for the month of August.

Calculate the variable overhead efficiency variance for the month of August. .

DL	10.00		Hr per unit
	20.00	22.00	$ per Hr
		3,200	Hr worked
	200.00		$ per Unit
VOH	3.00		MH per unit
	100.00		$ per MH
		850	MHs
		96,000	Cost OH
	300.00		$ per Unit
Units Prod		300

Variable Overhead Spending Variance	=	Actual OH [AHxAR]	-	( Actual Hours	x	Standard Rate )
	=		-		x
	=		-
	=			Unfavorable
Variable Overhead Efficiency Variance	=	Standard Rate	x	( Actual Hours	-	Standard Hours )
	=		x		-
	=		x
	=			Favorable