Compute the following variable overhead efficiency variance

Question

Four-Variance Analysis Use the following data given for Marilyn, Inc. In addition, the company has determined that actual variable overhead cost in April was $21,980.

Actual total cost for direct labor	$86,800
Total direct labor hours worked	14,000
Total standard labor hours for the output in April	15,000
Direct labor rate variance-unfavorable	$2,800
Actual total overhead cost	$32,000
Budgeted fixed overhead cost	$9,000
Practical capacity, in hours	12,000
Total overhead application rate per standard direct labor hour	$2.25

Required: Use the model presented in Exhibit to Compute the following variances for April:

1. Variable overhead efficiency variance.

2. Variable overhead spending variance.

3. Fixed overhead spending (budget) variance.

4. Production-volume variance.

Answer 1

For the topic of Four-Variance Analysis, make use of the given data provided for Marilyn, Inc. Moreover, the company has determined that real variable overhead cost in April was $21,980. Required: Make use of the model represented in Exhibit to calculate the given variances for the month April: 1) Variable overhead efficiency variance. 2) Variable overhead spending variance. 3) Fixed overhead spending (or budget) variance. 4) Production-volume variance.