Refer to the data in Exercise 11-3 for Jessel Corporation. Management would like to compute both spending and efficiency variances for variable overhead in the company’s variable overhead performance report.

Required:

Prepare a variable overhead performance report using the format in Exhibit 11–7. Compute both the variable overhead spending and efficiency variances.

Data form Exercise 11-3

Budgeted direct labor-hours Actual direct labor-hours 42,000 44,000 Standard direct labor-hours allowed 45,000 Cost formula (per direct labor-hour): Indirect labor.. Supplies.... Electricity .... $0.90 $0.15 $0.05 Actual costs incurred: Indirect labor $42,000 $6,900 Supplies .... Electricity .... $1,800