Compute the overhead spending variance and the volume
Course:- Accounting Basics
Reference No.:- EM13601498

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Standard manufacturing overhead based on normal monthly volume:

  • Fixed ($302,300 ÷ 20,000 units) $ 15.12
  • Variable ($100,000 ÷ 20,000 units) 5.00 $ 20.12
  • Units actually produced in current month 18,000 units
  • Actual overhead costs incurred (including $300,000 fixed) $ 383,800

Compute the overhead spending variance and the volume variance. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance). Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response.)

  • Overhead spending variance $ Favourable
  • Overhead volume variance $ Unfavourable

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