Question
Wisteria Co. produces snowboards and uses a standard cost system. Variable overhead is applied using direct labor hours. Standards allowed for each unit are 5.3
Wisteria Co. produces snowboards and uses a standard cost system. Variable overhead is applied using direct labor hours. Standards allowed for each unit are 5.3 hours of labor at a standard variable overhead rate of $7.20. During December, Wisteria Co. produced 3,050 snowboards. Materials purchases totaled 20,800 pounds at a total cost of $224,780. Materials usage totaled 21,060 pounds. Payroll totaled $183,680 for 17,130 hours worked. Variable overhead incurred totaled $121,066. a. Calculate the variable overhead rate variance. (Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).) b. Calculate the variable overhead efficiency variance. (Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). Do not round your intermediate calculations and round your final answer to the nearest whole dollar amount.)
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