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GenaCL600 [577]
3 years ago
6

The following information is available for Harrison’s Hot Dogs: Actual production 12,320 packages, Budgeted production 12,500 pa

ckages, Standard direct labor hours 1.5 direct labor hours per package, actual direct labor hours 19,500, Standard variable overhead rate $3 per direct labor hour,Actual variable overhead costs $50,000. Calculate the variable overhead spending and efficiency variances.
Business
1 answer:
muminat3 years ago
6 0

Answer:

$3,060 Unfavorable

Explanation:

<em>Variable overhead efficiency variance is the difference between the actual time taken to achieve a given production output less the standard hours for same multiplied by the standard variable overhead rate</em>

<em>Variable overhead efficiency variance is determined as follows:</em>

                                                                                                Hours

12,320 packages should have taken (12,320 × 1.5 )           18,480.

but did take                                                                           <u>19,500</u>

Efficiency variance ( in hours  )                                             1,020 Unfav.

× standard variable OH rate                                                 <u> × $3</u>

Variable overhead efficiency variance ($)                       <u>$3,060 Unfavourable</u>

                                                       

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