Variable Overhead Variances
Smith Tax Company considers 6,000 direct labor hours or 300 tax
returns its normal monthly capacity. Its standard variable overhead
rate is $50 per direct labor hour. During the current month,
$250,400 of variable overhead cost was incurred in working 5,500
direct labor hours to prepare 270 tax returns. Determine the
following variances, and indicate whether each is favorable or
unfavorable:
Determine the following variances:
Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable.
Variable Overhead Variances | ||
---|---|---|
Actual cost: | Answer | |
Split cost: | Answer | |
Standard cost: | Answer | |
a. Variable overhead spending | Answer | AnswerFU |
b. Variable overhead efficiency | Answer |
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