The manager of the automobile registration division of the state of Alabama has determined that it typically takes 30 minutes for the department's employees to register a new car. The following predetermined overhead costs are applicable to Gladston County. Fixed overhead, computed on an estimated 4000 direct labor hours, is $8 per DLH. Variable overhead is estimated at $3 per DLH.
During July 2003, 7,600 cars were registered in Gladston County, taking 3,700 direct labor hours. For the month, variable overhead was $10,730 and fixed overhead was$29,950.
a. Compute overhead variance using a four-variance approach.
b. Compute overhead variance using a three-variance approach.
c. Compute overhead variance using a two-variance approach.