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.
direct labor hours = ___________________
2. Compute the variable overhead spending and efficiency variances.