Units Produced 131000 Standard direct labor hours per unit .20 Standard variable OH rate per dierect...

Units Produced 131000

Standard direct labor hours per unit .20

Standard variable OH rate per dierect labor hour 3.4

actual variable overhead costs 8670

Actaul hours worked 26350

1. Calculate the total variable overhead variance

2. What if the actual production was 129600 units? How would that affect the total variable overhead variance?

the total variable overhead variance

2. What if actual production has been

Solutions

Expert Solution

Answer 1.

Units produced = 131,000
Standard direct labor hours per unit = 0.20
Standard variable overhead rate per DLH = $3.40
Actual variable overhead costs = $8,670

Standard labor hours allowed = Units produced * Standard direct labor hours per unit
Standard labor hours allowed = 131,000 * 0.20
Standard labor hours allowed = 26,200

Variable overhead variance = Actual variable overhead costs - Standard labor hours allowed * Standard variable overhead rate per DLH
Variable overhead variance = $8,670 - 26,200 * $3.40
Variable overhead variance = $80,410 Favorable

Answer 2.

Units produced = 129,600
Standard direct labor hours per unit = 0.20
Standard variable overhead rate per DLH = $3.40
Actual variable overhead costs = $8,670

Standard labor hours allowed = Units produced * Standard direct labor hours per unit
Standard labor hours allowed = 129,600 * 0.20
Standard labor hours allowed = 25,920

Variable overhead variance = Actual variable overhead costs - Standard labor hours allowed * Standard variable overhead rate per DLH
Variable overhead variance = $8,670 - 25,920 * $3.40
Variable overhead variance = $79,458 Favorable

ekkarill92 answered 1 year ago

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