Standish Company manufactures consumer products and provided the following information for the month of February:
- Units produced: 131,400
- Standard direct labor hours per unit: 0.2
- Standard variable overhead rate (per direct labor hour): $3.40
- Actual variable overhead costs: $88,750
- Actual hours worked: 26,800
Required:
1. Calculate the variable overhead spending variance using the formula approach. (If you compute the actual variable overhead rate, carry your computations out to five significant digits and round the variance to the nearest dollar.) $______ favorable or unfavorable
2. Calculate the variable overhead efficiency variance using the formula approach. $ ____ favorable or unfavorable
3. What if 26,100 direct labor hours were actually worked in February? What impact would that have had on the variable overhead spending variance?
- would be larger
- would be smaller
- no impact
- it would be favorable or unfavorable
What impact would that have had on the variable overhead efficiency variance?
- would be larger
- would be smaller
- no impact
- it would be favorable or unfavorable