Calculate the variable overhead spending efficiency variance

Reference no: EM131174768

Problem 1

The following standard costs were developed for one of the products of CH Industries: STANDARD COST CARD PER UNIT

Direct materials: 4 feet x $14 per foot	$ 56.00
Direct labor: 8 hours x $10 per hour	80.00
Variable overhead: 8 hours x $8 per hour	64.00
Fixed overhead: 8 hours x $12 per hour	96.00
Total standard cost per unit	$296.00

The following information is available regarding the company's operations for the period:

Units produced	11,000
Materials purchased & used	40,000	feet at $13.70 per foot
Materials used	40,000	feet
Direct labor	84,000	hours costing $840,000
Variable OH	mce_markernbsp; 650,000
FOH	mce_markernbsp; 1,050,000

Required:

a	Calculate the variable overhead spending and efficiency variances and indicate whether it is favorable or unfavorable.
b	Calculate the fixed overhead spending and volume variances and indicate whether it is favorable or unfavorable. Assume the master budget called for fixed overhead is $1,520,000.

Reference no: EM131174768

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