Question

2 Exercise 10-3 Variable Overhead Variances [LO10-3] Logistics Solutions provides order fulfillment services for dot.com merchants. The company malntains warehouses that stock Items carried by Its dot.com cllents. When a clilent recelves an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and shlips it to the customer. The company uses a predetermined variable overhead rate based 12.5 points 0841 on direct labor-hours. dn the most recent month, 120,000 items were shlpped to customers using 2.300 direct labor-hours. The company Incurred a total of kipped $7,360 In varlable overhead costs. According to the company's standards, 0.02 direct labor-hours are requlred to fulfill an order for one Item and the varlable overhead rate Is $3.25 per direct labor-hour eBook Requlred: 1. What is the standard labor-hours allowed (SH) to ship 120,000 ltems to customers? 2 What is the standard varlable overhead cost allowed (SH x SR) to shlp 120,000 Items to customers? 3. What Is the variable overhead spending varlance? 4. What Is the varlable overhead rate varlance and the varlable overhead efficlency varlance? Hint Print For requirements 3 and 4, Indicate the effect of each verlence by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.е., zero variance). Input all amounts as positive values. D。not round intermediate calculations.) References 1. Standard quantity of labor-hours allowed 2 Standard variable overhead cost allowed 3. Variable overhead spending variance 4. Variable overhead rate variance Variable overhead efficiency variance

Answer 1

customers ? Standond qyantity Numben of items sh 1,20,000 X 0.02-2M Slandood vosiable oveshood cost allo Standard quantity cost ber hous 2 nq variance CAH XAR (SHX SR =4す360一书4,800 -2,300 housus($3, 20hon hous,-$3.25 per hoto) 115 P $-7,360 ÷ 2,300 hours = 3.20 ph hous 3,25 pen hous (2,3oo hous 240o hos 325 F