Calculate the variable overhead spending variance for Job Alpha g. Calculate the variable overhead efficiency variance for Job Alpha h. What is the company’s fixed overhead spending variance
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
f. Calculate the variable overhead spending variance for Job Alpha
g. Calculate the variable overhead efficiency variance for Job Alpha
h. What is the company’s fixed overhead spending variance
![6. A company has the following information for Job Alpha during July:
Units produced
1,000
Actual materials used (and purchased)
$
5,250 Ibs.
Actual materials cost
4.80 per Ib.
Actual labor hours incurred
2,552
Actual labor rate
$ 21.25 per hour
Work in process, July 1
Work in process, July 31
The company applies manufacturing overhead to jobs based on direct labor hours.
Additional information for the company in July is as follows:
Total estimated labor hours
45,232
Standard materials per unit
5.00 Ibs.
Standard materials cost
$
5.00 per Ib.
Standard labor hours per unit
2.75 hours
Standard labor rate
$
22.00 per hour
Standard variable overhead
3.00 per labor hour
Standard fixed overhead*
5.00 per labor hour
*based on 45,232 labor hours
Actual total output in units
16,500
Actual total labor hours
43,725
2.90 per labor hour
$ 220,000
Actual variable overhead
Actual total fixed overhead](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff20011ab-ef99-4cb7-8e76-44fbefc433c5%2Faecf54f2-6cd8-4f84-9b55-645e2b1f2475%2F1gsfcm8_processed.png&w=3840&q=75)
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