Help O EClick the loon to view the alocates overhead 2700 ac

Help O E(Click the loon to view the alocates overhead, $2,700 actual direct labor hours, 1,400 Requirement 1. Compute the veriable overhead cost and efficiency variances and fteed overhead cost and volume variances VOH efficiency variance actual cost AQ-actual quantity, FOH-Sxed overhead, SC-standard cost, 5Q-standard quandty FOH cost variance FOH volume variance or unfavorable the acta·cost per ator hour-as | ??than to \"andardcoa peram tator hour

Solution

1) VOH Cost Variance = Actual Variable Overhead - (Standard Cost per unit*Actual Quantity)

Standard Cost per unit = Static budget variable overhead/Static budget no. of units

= $1,500/375 units = $4 per unit

VOH Cost Variance = $3,800 - ($4 per unit*1,000 units)

= $3,800 - $4,000 = $200 Favorable

VOH Efficiency Variance = (Standard Cost per unit*Actual Quantity) - Static budget variable overhead

= $4,000 - $1,500 = $2,500 Unfavorable

FOH Cost Variance = Actual FOH - Applied FOH

Applied FOH = Static budget fixed overhead*(Actual Quantity/Static budget no. of units)

= $2,250*(1,000 units/375 units) = $6,000

FOH Cost Variance = $2,700 - $6,000 = $3,300 Favorable

FOH Volume Variance = Applied FOH - Static budget fixed overhead

= $6,000 - $2,250 = $3,750 Unfavorable

2) The variable overhead cost variance is Favorable because the actual cost per direct labor hour was less than the standard cost per direct labor hour.