Answer:
a. $5,000 unfavorable
b. $24,600 favorable
Explanation:
The computations are shown below:
a. Variable overhead efficiency variance = Standard rate × (Standard hours - Actual hours)
where,
Standard variable overhead rate is $50
Actual hours is 5,500 direct labor hours
Standard hours is
= 6,000 ÷ 300 × 270 = 5,400 direct labor hours
So, the Variable overhead efficiency variance is
= $50 × (5,400 direct labor hours - 5,500 direct labor hours)
= $50 × - 100 direct labor hours
= $5,000 unfavorable
b. And, variable overhead spending variance is
= (Actual hours × Standard rate) - Actual cost
= (5,500 hours × $50) - $250,400
= $275,000 - $250,400
= $24,600 favorable
