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Compute the variable overhead spending

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Reference no: EM13337708

Sedona Company set the following standard costs for one unit of its product for 2013.

Direct material (15 Ibs. @ $3.20 per Ib.)
$ 48.00
Direct labor (10 hrs. @ $9.50 per hr.)

95.00
Factory variable overhead (10 hrs. @ $4.60 per hr.)

46.00
Factory fixed overhead (10 hrs. @ $2.20 per hr.)

22.00



Standard cost
$ 211.00




The $6.80 ($4.60 + $2.20) total overhead rate per direct labor hour is based on an expected operating level equal to 75% of the factory's capacity of 56,000 units per month. The following monthly flexible budget information is also available.
Operating Levels (% of capacity)






70%


75%


80%
Budgeted output (units)

39,200


42,000


44,800
Budgeted labor (standard hours)

392,000


420,000


448,000
Budgeted overhead (dollars)











Variable overhead
$ 1,803,200

$ 1,932,000

$ 2,060,800
Fixed overhead

924,000


924,000


924,000







Total overhead
$ 2,727,200

$ 2,856,000

$ 2,984,800







During the current month, the company operated at 70% of capacity, employees worked 371,000 hours, and the following actual overhead costs were incurred.

Variable overhead costs
$ 1,716,000
Fixed overhead costs

1,015,200



Total overhead costs
$ 2,731,200




Compute the variable overhead spending and efficiency variances. (Round "AVR" and "SVR" to 2 decimal places.)

Reference no: EM13337708

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