E9-13 (Algo) Calculating Variable Manufacturing Overhead Variances [LO 9-5] Lamp Light Limited (LLL) manufactures tampshades. It applies variable overhead on the basis of direct labor hours. Information from LLL's standard cost card follows: Variable manufacturing overhead During August, LLL had the following actual results: Units produced and sold Actual variable overhead Actual direct labor hours Standard Quantity 0.6 Variable Overhead Rate Variance Variable Overhead Efficiency Variance Variable Overhead Spending Variance 24,400 $ 9,430 15,400 Standard Rate $0.80 Standard Unit Cost $0.48 Required: Compute LLL's variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).
E9-13 (Algo) Calculating Variable Manufacturing Overhead Variances [LO 9-5] Lamp Light Limited (LLL) manufactures tampshades. It applies variable overhead on the basis of direct labor hours. Information from LLL's standard cost card follows: Variable manufacturing overhead During August, LLL had the following actual results: Units produced and sold Actual variable overhead Actual direct labor hours Standard Quantity 0.6 Variable Overhead Rate Variance Variable Overhead Efficiency Variance Variable Overhead Spending Variance 24,400 $ 9,430 15,400 Standard Rate $0.80 Standard Unit Cost $0.48 Required: Compute LLL's variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).
Chapter1: Financial Statements And Business Decisions
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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.
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![E9-13 (Algo) Calculating Variable Manufacturing Overhead Variances [LO 9-5]
Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct labor hours. Information from
LLL's standard cost card follows:
Variable manufacturing overhead
During August, LLL had the following actual results:
Units produced and sold
Actual variable overhead
Actual direct labor hours
Standard
Quantity
0.6
Variable Overhead Rate Variance
Variable Overhead Efficiency Variance
Variable Overhead Spending Variance
24,400
$ 9,430
15,400
Standard Rate
$0.80
Standard
Unit Cost
$0.48
Required:
Compute LLL's variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead.
Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (i.e., zero variance).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F492121c0-3843-4585-9c4f-58f7a1b7b43d%2Fd3c0de62-ba17-4d30-a529-78f4b73ce87c%2Fedveeia_processed.jpeg&w=3840&q=75)
Transcribed Image Text:E9-13 (Algo) Calculating Variable Manufacturing Overhead Variances [LO 9-5]
Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct labor hours. Information from
LLL's standard cost card follows:
Variable manufacturing overhead
During August, LLL had the following actual results:
Units produced and sold
Actual variable overhead
Actual direct labor hours
Standard
Quantity
0.6
Variable Overhead Rate Variance
Variable Overhead Efficiency Variance
Variable Overhead Spending Variance
24,400
$ 9,430
15,400
Standard Rate
$0.80
Standard
Unit Cost
$0.48
Required:
Compute LLL's variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead.
Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (i.e., zero variance).
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