At the beginning of the year, Lopez Company had the following standard cost sheet for...
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Accounting
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products:
| Direct materials (4lbs @ $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 90,000 units. The actual results for the year are as follows: (a) Units produced: 88,000; (b) Direct labor: 170,000 hours at $18.10; (c) FOH: $930,000; and (d) VOH: $125,000.
Required:
- Compute the variable overhead spending and efficiency variances.
- Compute the fixed overhead spending and volume variances.
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