Calculating Variable Manufacturing Overhead Variances
ClearView Company manufactures clear plastic CD cases. It applies variable overhead based on the number of machine hours used. Information regarding ClearView’s overhead for the month of December follows:
| Standard Quantity | Standard Rate | Standard Unit Cost |
Variable manufacturing overhead | 0.1 machine hours per case | $0.50 per machine hour | $0.05 |
During December, ClearView had the following actual results.
Number of units produced and sold | 625,000 |
Actual variable overhead cost | $ 30,240 |
Actual machine hours | 63,000 |
Required:
Compute ClearView’s variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead.
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