Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year’s delivery operations: Deliveries made   38,600   Direct labor   31,000  direct labor hours @ $14.00 Actual variable overhead   $157,700   Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery. Required: 1. Compute the standard hours allowed for actual deliveries made last year. fill in the blank 1 direct labor hours 2. Compute the variable overhead spending and efficiency variances. Enter amounts as positive numbers and select Favorable or Unfavorable. Spending variance   $fill in the blank 2     Efficiency variance   $fill in the blank 4

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Chapter1: Financial Statements And Business Decisions
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Variable Overhead Variances, Service Company

Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year’s delivery operations:

Deliveries made   38,600  
Direct labor   31,000  direct labor hours @ $14.00
Actual variable overhead   $157,700  

Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery.

Required:

1. Compute the standard hours allowed for actual deliveries made last year.
fill in the blank 1 direct labor hours

2. Compute the variable overhead spending and efficiency variances. Enter amounts as positive numbers and select Favorable or Unfavorable.

Spending variance   $fill in the blank 2  
 
Efficiency variance   $fill in the blank 4  
 

 

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