Atlanta Adhesives Inc budgets 15 000 direct labor hours for the
Atlanta 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:
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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