Question

TB Problem Qu. 10-239 The following data for November have been provided.... The following data for November have been provided by Hunn Corporation, a producer of precision drills for oil exploration: Budgeted production Standard machine-hours per drill er den Standard indirect labor Standard power 5,000 drills 10.3 machine-hours 10.10 per machine-hour 3.70 per machine-hour $ $ Actual production Actual machine-hours Actual Indirect labor Actual power 5,200 drills 36,650 machine-hours $372,823 $134,250 Required: Compute the variable overhead rate variances for indirect labor and for power for November Indicate whether each of the variances is favorable (F) or unfavorable (U). (indicate the effect of each varience by selecting "F" for favorable. "U" for unfavorable, and "None" for no effectie. Zero variance). Input all amounts as positive values.) Variable Overhead Rate Variance Indirect labor

Answer 1

Variable Overhead Rate Variance = Actual Variable overhead - (Actual hours x Standard Variable overhead rate per hour) Var OHs Rate Variance (Indirect Labour) = $372823 - (36650 machine hours x $10.10) = $372,823 - $370,165 = $ 2,658.00 Unfavourable Var OHs Rate Variance (Power) = $134,250 - (36650 machine hours x $3.70) = $134,250 - $135,605 = $ 1,355.00 Favourable

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