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Overhead: Four-Variance Analysis The following information is available from Swinney Company for December:
Total factory overhead incurred
$40,000
Variable overhead expenses, incurred
$24,150
Fixed overhead expenses, budgeted
$18,000
Direct labor hours (DLH) worked
4,200
Standard direct labor hours allowed for the units manufactured
4,000
Practical capacity, in direct labor hours
4,500
Standard variable overhead rate per DLH
$5.00
Swinney uses direct labor hours to apply factory overhead.
Required: Use the framework presented in Exhibit to compute the following for the month of December:
1. Variable overhead spending variance.
2. Variable overhead efficiency variance.
3. Fixed overhead spending (budget) variance.
4. Fixed overhead production-volume variance.
5. Total overhead variance.
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