Calculate the variable overhead spending efficiency variance

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Reference no: EM131174768

Problem 1

The following standard costs were developed for one of the products of CH Industries:

STANDARD COST CARD

PER UNIT

 

 

 

Direct materials:   4 feet x $14 per foot 

$ 56.00

Direct labor:       8 hours x $10 per hour 

80.00

Variable overhead:  8 hours x $8 per hour 

64.00

Fixed overhead:     8 hours x $12 per hour 

  96.00

   Total standard cost per unit  

$296.00

The following information is available regarding the company's operations for the period:

Units produced   

11,000

 

Materials purchased  & used

40,000

feet at $13.70 per foot

Materials used

40,000

feet

Direct labor 

84,000

hours costing $840,000

Variable OH

 mce_markernbsp;          650,000

 

FOH

 mce_markernbsp;       1,050,000

 

Required:

a

Calculate the variable overhead spending and efficiency variances and indicate whether it is favorable or unfavorable.

b

Calculate the fixed overhead spending and volume variances and indicate whether it is favorable or unfavorable.  Assume the master budget called for fixed overhead is $1,520,000.

Reference no: EM131174768

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