Chapter 8, Problem 23E

(Appendix) Calculating factory overhead: three variances

Using the data given in E8-17, calculate the following overhead variances:

1. a. Spending variance.
2. b. Production-volume variance.
3. c. Efficiency variance.
4. d. Was the factory overhead under- or overapplied? By what amount?

In all problems involving variances, use “F” and “U” to indicate favorable and unfavorable variances, respectively.