Reference no: EM132873444

Problem - Moleno Company produces a single product and uses a standard cost system. The normal production volume is 120,000 units; each unit requires 5 direct labor hours at standard. Overhead is applied on the basis of direct labor hours. The budgeted overhead for the coming year is as follows: FOH At normal volume. VOH During the year, Moleno produced 118,600 units, worked 592,300 direct labor hours, and incurred actual fixed overhead costs of $2,150,400 and actual variable overhead costs of $1,422,800.

Required -

Compute the applied fixed overhead and the applied variable overhead. What is the total fixed overhead variance? Total variable overhead variance?

Break down the total fixed overhead variance into a spending variance and a volume variance. Discuss the significance of each.

Compute the variable overhead spending and efficiency variances. Discuss the significance of each.