Question

Hennings Travel Company specializes in the production of travel items (e.g., clocks, personal care kits). The following data were prepared so that a variance analysis could be performed.
FORECAST DATA (EXPECTED CAPACITY)
Direct labor hours ......... 40,000
Estimated overhead:
Fixed ............... $16,000
Variable .............. $30,000
ACTUAL RESULTS
Direct labor hours .......... 37,200
Overhead:
Fixed .............. $16,120
Variable ............ $28,060
The number of standard hours allowed for actual production was 37,000 hours.

Required
A. Calculate the variable overhead spending variance.
B. Calculate the variable overhead efficiency variance.



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  • CreatedMarch 11, 2015
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