Reference no: EM133026235

Question - At the beginning of the year, QP Company had the following standard cost sheet for one of its plastic products. QP planned to produce 500 units for the year.

Direct materials (6 pounds at $2.00 per pound) $12.00

Direct labor (5 hours at $18 per hour) 90.00

Standard prime cost per unit $102.00

QP uses a standard costing system.

During the year, a variable overhead rate of $4.50 per direct labor hour was used.

Actual results:

Actual number of units produced: 470

Materials purchased: 3,200 pounds at $2.35 per pound

Materials used in production: 3,040 pounds

Direct labor: 2,500 hours at $17.50

Actual variable overhead: $14,500

Required - Compute the following variances. Remember to label your answers with an F or U.

1. Compute the variable overhead spending variance.

2. Compute the variable overhead efficiency variance.