Cintron Company produces high-quality leather belts. The Boise plant uses a stan

Question

Cintron Company produces high-quality leather belts. The Boise plant uses a standard costing system with the following standards and actuals.

Direct labor is the basis for applying variable and fixed overhead.

What is the Variable Overhead Spending Variance?

Standard Price Direct Labor (DL) $ 13 Variable Overhead (per DL hour) $ 6 Fixed Overhead (per DL hour) $ 2.72 Budgeted Production for July 26,747 July Data Number of Belts Produced 34,474 Number of Labor Hours Used 17,994 Standard Labor Hours Allowed 17,824 Actual Variable Overhead Costs    $ 118,715 Actual Fixed Overhead Costs $ 168,453

Explanation / Answer

Variable Overhead Spending Variance :

                                 =Actual hours worked x (Actual overhead rate - standard overhead rate)

   = Actual Variable Overhead Costs - (17994*6)

   = 118715 - 107,964 = $10,751 Unfavourable                     

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.