E9-11 Calculating Variable Manufacturing Overhead Variances [LO 9-5] Log In to C
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E9-11 Calculating Variable Manufacturing Overhead Variances [LO 9-5]
Log In to Canvas Chapter 9 GRADED Hamework Austin O ezto.mheducation.com/hm.tpx 2.00 points E9-11 Calculating Variable Manufacturing Overhead Variances [LO 9-5] Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct labor hours. Information from LLL's standard cost card follows: Standard Standard Standard QuantityRate Unit Cost S0.80 Variable 0.6 S0.48 overhead During August, LLL had the following actual results: Units produced and sold Actual variable overhead Actual direct labor hours 24,400 $ 9,430 15,400 Required Compute LLL's variable overhead rate variance, variable overhead efficiency variance, and over-or underapplied variable overhead. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for Favorable/Overapplied and "U" for Unfavorable/Underapplied.) Variable Overhead Rate Variance Variable Overhead Efficiency Variance Variable Overhead Spending Variance Hints References eBook & Resources Hint#1Explanation / Answer
1. Variable overhead rate variance = Actual hours * standard rate - Actual hours * actual rate
= 15400 * $0.8 - $9430
= $12320 - $9430
= $2890 Favorable
Note:- Actual variable overhead =Actual hours * actual rate
2. variable overhead efficiency variance = standard rate ( Actual hours - standard hours allowed)
= $0.80 (15400 - [0.6 * 24400 units])
= $0.80 (15400 - 14640)
= $608 Unfavorable
3. variable overhead spending variance = Variable overhead rate variance + variable overhead efficiency variance
= 2890 Favorable + $608 Unfavorable
= $2282 favorable
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