Question

Goldman Company manufactures shirts. During June, Goldman made 1.500 shirts but had budgeted production at 1,575 shirts. Goldman gathered the following additional data: (Click on the icon to view the data.) Read the requirements. i Data Table 13. Calculate the variable overtiead cost variarice. Select the formula, then enter the amounts and compute the cost variance for variable overhead (VOH) and identify whether the variance is favorable (F) or unfavorable (U) = VOH Cost Variance Actual Cost 14. Actual Quantity Sele Standard Cost Standard Quantity Variable overhead cost standard Direct labor efficiency standard Actual amount of direct labor hours Actual cost of variable overhead Fixed overhead cost standard Budgeted fixed overhead Actual cost of fixed overhead $0.10 per DLHO 3.50 DLHr per shirt 5,360 DLHO $2,144 $0.55 per DLHO $3,032 $3,157 erhead efficiency variance. the amounts and compute the efficiency variance for variable overhead and identify whether the variance is favorable (F) or unfavorable (U). = VOH Efficiency Variance 15. Calculate the total variable overhead variance Print Done The total variable overhead variance is Requirements 16. Calculate the fixed overhead cost variance Select the formula, then enter the amounts and compute the cost variance for fixed overhead (FOH) and identify whether the variance is favorable (F) or unfavor = Fixed Overhead Cost Variance Calculate the following variances: 13. Variable overhead cost variance 14. Variable overhead officiency variance 15. Total variable overhead variance 16. Fixed overhead cost variance 17. Fixed overhead volume variar 18. Total fixed overhead variance Choose from any list or enter any number in the input fields and then continue to the next question. Print Done

Answer 1

13. Variable overhead cost variance is the difference between the actual and the budgeted spending rates in the actual hours worked.

Variable Overhead Cost Variance = Actual hours worked * ( Actual overhead rate - Standard Overhead rate)

Actual Overhead Rate = Actual cost of variable overhead/ Actual amount of direct labor hours = 2144/5360 = $0.4 per DL Hr

Variable Overhead Cost Variance = 5360 * (0.4-0.10) = 5360 * 0.3 = $1608 Variable Overhead Cost Variance

The variance is unfavourable as the actual overhead rate is more than the standard overhead rate.

14. Variable overhead efficiency variance = Standard Overhead rate * (Actual hours - Standard hours)

Standard hours = Direct labour efficiency standard * Actual number of shirts produced = 3.5 * 1500 = 5250 hours

Variable overhead efficiency variance = 0.10 (5360 - 5250) = $11 Variable overhead efficiency variance

The variance is unfavourable because the actual labor hours are more than the standard labor hours.