You have been asked to prepare an analysis of the overhead costs in the order processing department of a mail-order company like Eddie Bauer. As an initial step, you prepare a summary of some events that bear on overhead for the most recent period. Variable overhead is applied based on hours of processing-clerk labor. The standard variable-overhead rate per order was $.06. The rate of 10 orders per hour is regarded as standard productivity per clerk. The total overhead incurred was $204,000, of which $138,000 was fixed. The fixed-overhead spending variance was $2,500 unfavorable. The variable-overhead flexible-budget variance was $6,000 unfavorable. The variable-overhead spending variance was $3,600 favorable.
Find the following:
1. Variable-overhead efficiency variance
2. Actual hours of input
3. Standard hours of input allowed for output achieved
4. Budgeted-fixed overhead

  • CreatedNovember 19, 2014
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