a company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 205,000 items were shipped to customers using 9,200 direct labor-hours. The company incurred a total of $33,580 in variable overhead costs. According to the company’s standards, 0.02 direct labor-hour is required to fulfill an order for one item and the variable overhead rate is $3.70 per direct labor-hour. What is the variable overhead spending variance? What are the variable overhead rate variance and the variable overhead efficiency variance?
a company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 205,000 items were shipped to customers using 9,200 direct labor-hours. The company incurred a total of $33,580 in variable overhead costs. According to the company’s standards, 0.02 direct labor-hour is required to fulfill an order for one item and the variable overhead rate is $3.70 per direct labor-hour. What is the variable overhead spending variance? What are the variable overhead rate variance and the variable overhead efficiency variance?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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a company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable
In the most recent month, 205,000 items were shipped to customers using 9,200 direct labor-hours. The company incurred a total of $33,580 in variable overhead costs.
According to the company’s standards, 0.02 direct labor-hour is required to fulfill an order for one item and the variable overhead rate is $3.70 per direct labor-hour.
- What is the variable overhead spending variance?
- What are the variable overhead rate variance and the variable overhead efficiency variance?
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