Rexford Components shows the following overhead information for the current period: Actual overhead incurred $ 105,840 , 2/3 of which is variable Budgeted fixed overhead $ 31,104 Standard variable overhead rate per direct labor-hour $ 27 Standard hours allowed for actual production 2,820 hours Actual labor-hours used 2,640 hours Required: What are the variable overhead price and efficiency variances and fixed overhead price variance? (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
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.
Rexford Components shows the following
| Actual overhead incurred | $ | 105,840 | , 2/3 of which is variable |
| Budgeted fixed overhead | $ | 31,104 | |
| Standard variable overhead rate per direct labor-hour | $ | 27 | |
| Standard hours allowed for actual production | 2,820 | hours | |
| Actual labor-hours used | 2,640 | hours | |
Required:
What are the variable overhead price and efficiency variances and fixed overhead price variance? (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
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