labor hours. Standards allowed for each unit are 2.0 hours of labor at a variable overhead rate of $15. During November, Branch Corporation produced 2,550 units. Payroll totaled $97,880 for 5,640 hours worked. Variable overhead incurred totaled $92,185. Required: a. Calculate the variable overhead rate variance. Note: Round your intermediate calculations to two decimals and final answers to nearest whole dollar. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). b. Calculate the variable overhead efficiency variance. Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). c. Calculate the variable overhead spending variance. Note: Round your intermediate calculations to two decimals and final answers to nearest whole dollar. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). a. Rate Variance b. Efficiency Variance c. Spending Variance
labor hours. Standards allowed for each unit are 2.0 hours of labor at a variable overhead rate of $15. During November, Branch Corporation produced 2,550 units. Payroll totaled $97,880 for 5,640 hours worked. Variable overhead incurred totaled $92,185. Required: a. Calculate the variable overhead rate variance. Note: Round your intermediate calculations to two decimals and final answers to nearest whole dollar. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). b. Calculate the variable overhead efficiency variance. Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). c. Calculate the variable overhead spending variance. Note: Round your intermediate calculations to two decimals and final answers to nearest whole dollar. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). a. Rate Variance b. Efficiency Variance c. Spending Variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Branch Corporation uses a standard cost system to account for the costs of its one product. Variable overhead is applied using direct
labor hours. Standards allowed for each unit are 2.0 hours of labor at a variable overhead rate of $15. During November, Branch
Corporation produced 2,550 units. Payroll totaled $97,880 for 5,640 hours worked. Variable overhead incurred totaled $92,185.
Required:
a. Calculate the variable overhead rate variance.
Note: Round your intermediate calculations to two decimals and final answers to nearest whole dollar. Indicate the effect of
variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).
b. Calculate the variable overhead efficiency variance.
Note: Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).
c. Calculate the variable overhead spending variance.
Note: Round your intermediate calculations to two decimals and final answers to nearest whole dollar. Indicate the effect of
variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).
a. Rate Variance
b. Efficiency Variance
c. Spending Variance.
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