Question: Hennings Travel Company specializes in the production of travel items

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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