Variable Overhead Spending and Efficiency Variances, Columnar and Formula Approaches

Aretha Company provided the following information:

Standard variable overhead rate (SVOR) per direct labor hour$4.70

Actual variable overhead costs$335,750

Actual direct labor hours worked (AH)69,200

Actual production in units14,000

Standard hours (SH) allowed for actual units produced70,000

Required:

1.Using the columnar approach, explain the variable overhead spending and efficiency variances. Enter amounts as positive numbers and select Favorable (F) or Unfavorable (U).

• (1)Actual VOH
• Standard hours
• Actual hours
• (2)AH x SVOR
• SH x SVOR
• Spending variance
• (3)AH x SVOR
• SH x SVOR
• Efficiency variance
• U
• F
• U
• F

Spending Efficiency

2. Using the formula approach, calculate the variable overhead spending variance. Enter amount as a positive number and select Favorable or Unfavorable.

$

• Favorable
• Unfavorable

3. Using the formula approach, explain the variiable overhead efficiency variance. Enter amount as a positive number and select Favorable or Unfavorable.

$

• Favorable
• Unfavorable

4. explain the total variable overhead variance. Enter amount as a positive number and select Favorable or Unfavorable.

$