Andro Adhesives Inc. budgets 15,000 direct labor hours for the year. The total overhead budget is expected

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Andro Adhesives Inc. budgets 15,000 direct labor hours for the year. The total overhead budget is expected to amount to $42,000. The standard cost for a unit of the company's product estimates the variable overhead as follows:

Variable factory overhead (3 hours @ $2 per direct labor hour) . . . . $6 per unit

The actual data for the period follow:

Actual completed units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,500

Actual direct labor hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,500

Actual variable overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... $33,000

Actual fixed overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,700

Using the four-variance method, calculate the overhead variances.


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Principles of Cost Accounting

ISBN: 978-1133187868

16th edition

Authors: Edward J. Vanderbeck

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