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Variable Overhead Variances, Service Company Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested
Variable Overhead Variances, Service Company
Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year's delivery operations:
Deliveries made | 38,600 | |
Direct labor | 31,000 | direct labor hours @ $14.00 |
Actual variable overhead | $157,700 |
Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery.
Required: 1. Compute the standard hours allowed for actual deliveries made last year. direct labor hours 2. Compute the variable overhead spending and efficiency variances. Spending variance$ Efficiency variance $Step by Step Solution
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