The following i 20237 Solution Variable Overhead Spending va

The following i 20,237

Solution

Variable Overhead Spending variance = (Actual hours * Actual variable overhead rate per hour ) - (Actual hours * Standard variable overhead rate per hour) Actual hours * Actual rate per hour =$33,334 Actual hours =20,237 Standard variable overhead rate per hour =$2 per Direct Labour Hour Variable Overhead Spending variance = $33,334 - (20,237*$2) =$33334 -$40474 = - $7140 = $7140 Favourable Variable Overhead Efficiency variance = (Actual hour * Standard variable overhead rate per hour ) - (Standard hours * Standard variable overhead rate per hour) Actual hours =20,237 Standard variable overhead rate per hour =$2 per Direct Labour Hour Standard Hours =12500*1.61 Hours =20125 Hours Variable Overhead Efficiency variance = (20237 * $2) - (20125 *$2) =$40,474 -$40250 =$224   = $224 Unfavourable variable over head Spending variance $7140 favourable variable over head Efficiency variance $224 Unfavourable