Exercise $17-20($Algo$)$ Prorating Variable Overhead Cost Variances $($LO $17-1)$

Volte Corporation produces small electric appliances. The following information is available for the most recent period of operations:

Standard variable overhead rate

Actual output

Actual direct labor$-$hours used

Standard direct labor$-$hours

Actual direct labor cost incurred

Standard direct labor$-$hour rate

Actual variable overhead incurred

Actual units sold

$$3\mathrm{.}50$ per direct labor$-$hour

$28,000$ units

$36,500$

$$1,019,000$ per unit

$$1,019,000$

$$142,500$

$22,800$ units

Volte never has any work$-$in$-$process inventories and began the year with no finished goods inventory.

Required:

a$.$ and $b.$ What was the variable overhead price variance and the variable overhead efficiency variance for the period?

c$.$ Assume that Volte writes off all variances to Cost of Goods Sold. Prepare the entries Volte would make to record and close out the variances.

d$.$ Assume that Volte prorates all variances to appropriate accounts. Prepare the entries Volte would make to record and close out the variances.

Complete this question by entering your answers in the tabs below.

Req A and $B$

Req C

What was the variable overhead price variance and the variable overhead efficiency variance for the period?

Note: Indicate the effect of each variance by selecting $"$F$"$ for favorable, or $"U"$ for unfavorable. If there is no effect, do not select either option.

Variable overhead price variance

Variable overhead efficiency variance