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Problem - Bronfenbrenner Co. uses a standard cost system for its single product in which variable overhead is applied on the basis of direct labor hours. The following information is given:
Standard costs per unit:
Raw materials (1.5 grams at $16 per gram)
$24.00
Direct labor (0.75 hours at $8 per hour)
$6.00
Variable overhead (0.75 hours at $3 per hour)
$2.25
Actual experience for current year:
Units produced
22,400 units
Purchases of raw materials (21,000 grams at $17 per gram)
$357,000
Raw materials used
33,400 grams
Direct labor (16,750 hours at $8 per hour)
$134,000
Variable overhead cost incurred
$48,575
Compute the Variable overhead spending variance and variable overhead efficiency variance assuming that the price variance for materials is recognized at point of purchase.
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