Question
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
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 |
|
|
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