Solution-Calculate the variable overhead spending variances

Calculate the variable overhead spending variances

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Reference no: EM133098583

Question - Vaughn Company manufactures deep-sea fishing rods, which it distributes internationally through a chain of wholesalers. The following data are taken from the budget prepared at the beginning of the year by Vaughn's controller. The company applies overhead on the basis of machine hours.

	Annual Budget	May Budget
Variable manufacturing overhead	$2,181,600	$208,800
Fixed manufacturing overhead	$1,202,160	$100,180
Direct labor hours	48,600	4,050
Machine hours	242,400	23,200

During the month of May, Vaughn used 4,210 direct labor hours and 21,970 machine hours. The flexible budget for the month allowed 4,250 direct labor hours and 21,260 machine hours. Actual fixed manufacturing overhead incurred was $101,700; variable manufacturing overhead incurred was $196,530.

Required - Calculate the variable overhead spending and efficiency variances for May.

Reference no: EM133098583

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Calculate the variable overhead spending variances

Reference no: EM133098583

Reference no: EM133098583

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