At the beginning of the year the following standards were set. Overhead is applied using direct labor hours.
Budgeted Production 9,000 units
Materials: 2.0 pounds per unit at $9.00 per pound
Labor: 1.50 hours per unit at $26.00 per hour
Variable Overhead: $12.00 per labor hour
Fixed Overhead: $135,000 for the year
Actual results for the year follow:
Units Produced: 10,000
Material Purchased and Used: 20,400 pounds
Material Cost: $179,520
Labor hours worked: 14,700
Labor Cost: $401,310
Total Variable Overhead: $176,400
Total Fixed Overhead: $136,000
1. What is the labor efficiency variance (LEV)? Favorable/Unfavorable
2. What is the overhead controllable variance (OCV)? Favorable/Unfavorable
3. What is the overhead volume variance (OVV)? favorable/Unfavorable