Question

Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct labor...

Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct labor hours. Information from LLL’s standard cost card follows:

Standard Quantity Standard Rate Standard Unit Cost
Variable manufacturing overhead 0.6 $0.80 $0.48


During August, LLL had the following actual results:

Units produced and sold 24,600
Actual variable overhead $ 9,450
Actual direct labor hours 15,600


Required:
Compute LLL’s variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Variable Overhead Rate Variance   
Variable Overhead Efficiency Variance
Variable Overhead Spending Variance

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