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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