Reference no: EM133483379
Case: At the beginning of the year, Goodman Company had the following standard cost sheet for one of its food products:
Direct materials: 10 kg @ 3.20 per kg
Direct labour: 4 hours @ $9.00 per hour
Fixed overhead: 4 hours @ $4.00 per hour
Variable overhead: 4 hours @ $0.75 per hour
The company computes its overhead rates using practical volume, which is 72,000 units. The actual results for the year are
Units produced 70,000
Direct labour hours 290,000
Actual wage per hour $9.05
Fixed overhead $1,160,000
Variable overhead $218,000
Required: [Must include detailed calculation including formulas and Indicate if Favourable or Unfavourable]
A. Compute the fixed overhead spending and volume variances.
B. Compute the variable overhead spending and efficiency variances.