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12.- Overhead Variances At the beginning of the year, Lopez Company had the following standard...

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Accounting

12.-

Overhead Variances

At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products:

Direct materials (4 lbs. @ $2.80) $11.20
Direct labor (2 hrs. @ $18.00) 36.00
FOH (2 hrs. @ $5.20) 10.40
VOH (2 hrs. @ $0.70) 1.40
Standard cost per unit $59.00

Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at $18.10; (c) FOH: $831,000; and (d) VOH: $112,400.

Required:

1. Compute the variable overhead spending and efficiency variances. Enter amounts as positive numbers and select Favorable or Unfavorable.

Spending variance $fill in the blank 1
FavorableUnfavorable
Efficiency variance $fill in the blank 3
FavorableUnfavorable

2. Compute the fixed overhead spending and volume variances. Enter amounts as positive numbers and select Favorable or Unfavorable.

Spending variance $fill in the blank 5
FavorableUnfavorable
Volume variance $fill in the blank 7
FavorableUnfavorable

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