Calculating the Variable Overhead Spending and Efficiency Variances Refer to Cornerstone Exercise 9.6.

Required:
1. Calculate the variable overhead spending variance using the formula approach. (If you compute the actual variable overhead rate, carry your computations out to five significant digits and round the variance to the nearest dollar.)
2. Calculate the variable overhead efficiency variance using the formula approach.
3. Calculate the variable overhead spending variance and variable overhead efficiency variance using the three-pronged graphical approach.
4. What if 26,100 direct labor hours were actually worked in February? What impact would that have had on the variable overhead spending variance? On the variable overhead effficiency variance?

Transcribed Image Text:

Units produced Standard direct labor hours per unit Standard variable overhead rate (per direct labor hour) 131,000 0.20 $3.40 $88,670 26,350 Actual variable overhead costs Actual hours worked