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The Ichiban Golf Ball Co applies its overhead costs to its premium golf ball based on direct labour hours. The denominator activity is 10,000 direct
The Ichiban Golf Ball Co applies its overhead costs to its premium golf ball based on direct labour hours. The denominator activity is 10,000 direct labour hours, and the budget fixed overhead costs for the production equipment and facility are $8,200. The standard cost card shows the following: Pre-determined variable overhead rate is $0.92 per direct labour hour and each golf ball requires 25 direct labour hours The Company had the following actual operating results Number of units produced Actual direct labour hours Actual variable overhead costs Actual fixed overhead costs 44,400 10,656 $10,123.20 $ 9,057.60 Required: 1. Calculate the variable overhead spending and efficiency variances. (5.5 marks) 2. Calculate the fixed overhead budget and volume variances. (5.5 marks) Label your variances (name and Favourable or Unfavourable)
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