15-51 Standard Cost Variance Analysis and InterpretationsGlavine & Co. produces a single prod- uct, each unit of whichrequires three direct labor hours (DLHs). Practical capacity (forsetting the factory overhead application rate) is 30,000 DLHs, onan annual basis. The information below per- tains to the mostrecent year: Standard direct labor hours (DLHs) per unit produced3.00 Practical capacity, in DLHs (per year) 30,000 VariableOverhead Efficiency Variance $5,000 unfavorable (U) Actualproduction for the year 9,500 units Budgeted fixed manufacturingoverhead $600,000 Standard direct labor wage rate $20.00 per DLHTotal overhead cost variance for the year $50,000 favorable (F)Direct Labor Efficiency Variance $10,000 unfavorable (U) Required1. What was the actual number of direct labor hours (DLHs) workedduring the year? (Round answer to nearest whole number.) [Hint:Recall from Chapter 14 that the DL Efficiency Variance = SP × (SQ ?AQ), where SP = standard labor rate per hour, SQ = standard # ofDLHs for output produced, and AQ = actual number of DLHs worked.]2. What was the standard variable overhead rate per DLH during theyear? (Round answer to 2 decimal places, e.g., $13.231 = $13.23.)[Hint: Recall that the Variable Overhead Efficiency Variance = SP ×(SQ ? AQ), where [assuming variable overhead is applied on thebasis of DLHs] SP = standard variable overhead cost per DLH, SQ =standard # of DLHs for output produced, and AQ = actual # of DLHsworked during the period.] 3. What was the total overheadapplication rate per direct labor hour (DLH) during the year?(Round answer to 2 decimal places, e.g., $15.679 = $15.68.) 4. Whatwas the total actual overhead cost incurred during the year,rounded to the nearest whole dollar? 5. What was the ProductionVolume Variance (to the nearest whole dollar) for the year? Wasthis variance favorable (F) or unfavorable (U)? 6. What was thetotal Overhead Spending Variance (to the nearest whole dollar) forthe year? Was this variance favorable (F) or unfavorable (U)?
