Jasper Company makes a single product. Its standard costs per unit are as follows: Direct materials, 2 pounds @$4.50 $9 Direct labour, 3 hours @$5 15 Overhead $10 per direct labour-hour (DLH)* 30 Standard cost per unit $54 *Based on normal capacity of 50,000 units. $7 per DLH is variable. At the beginning of 2019, there were no inventories. During 2019, the following events occurred: 1.Direct labour was $790,750 for 151,000 DLH worked. 2.Variable overhead incurred was $1,046,000. 3.Fixed overhead was $490,000. 4.Jasper produced 48,000 units. There were no unfinished goods or work in process(WIP) at the end of 20X6. Required 1.What was the total overhead spending variance (variable and fixed) for 2019? 2.What was the fixed overhead volume variance for 2019?
Jasper Company makes a single product. Its
Direct materials, 2 pounds @$4.50 $9
Direct labour, 3 hours @$5 15
Standard cost per unit $54
*Based on normal capacity of 50,000 units. $7 per DLH is variable.
At the beginning of 2019, there were no inventories. During 2019, the following events occurred:
1.Direct labour was $790,750 for 151,000 DLH worked.
2.Variable overhead incurred was $1,046,000.
3.Fixed overhead was $490,000.
4.Jasper produced 48,000 units. There were no unfinished goods or work in process(WIP) at the end of 20X6.
Required
1.What was the total overhead spending variance (variable and fixed) for 2019?
2.What was the fixed overhead volume variance for 2019?
Overhead variance is obtained by reducing the actual overheads from the budgeted cost of overheads.
Calculate the total overhead spending variance (variable and fixed) for the year 2019 as follows:
- Calculate the overhead spending variance (variable) as follows:
The overhead spending variance (variable) is - $11,000 (unfavorable).
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