Lindon Company's flexible budget for variable manufacturing overhead is given below:
|
Cost Formula
|
6,000
|
8,000
|
10,000
|
|
Overhead costs
|
per DLH
|
DLHs
|
DLHs
|
DLHs
|
|
Supplies
|
$0.20
|
$1,200
|
$1,600
|
$2,000
|
|
Indirect labor
|
0.50
|
3,000
|
4,000
|
5,000
|
|
Utilities
|
0.05
|
300
|
400
|
500
|
|
Total overhead cost
|
$0.75
|
$4,500
|
$6,000
|
$7,500
|
During a recent period, the company produced 2,500 units of product using 7,600 direct labor-hours (DLHs). The standard allows 3 direct labor-hours per unit. Actual variable overhead costs incurred were:
|
Supplies
|
$1,900
|
|
Indirect labor
|
3,040
|
|
Utilities
|
570
|
|
Total overhead cost
|
$5,510
|
The company had originally budgeted to produce 2,600 units during the period using 7,800 direct labor-hours.
Required:
Prepare a performance report for the period showing only the spending variances for each overhead cost category.