Refer to the information for Rostand Inc. above.
Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year’s delivery operations:
Deliveries made .......... 38,600
Direct labor ............. 31,000 direct labor hours @ $ 9.00
Actual variable overhead ........$ 157,700
Rostand employs a standard costing system.
During the year, a variable overhead rate of $ 5.10 per hour was used. The labor standard requires 0.80 hour per delivery.
1. Compute the standard hours allowed for actual deliveries made last year.
2. Compute the variable overhead spending and efficiency variances.