Overhead: Four-Variance Analysis The following information is available from Swinney Company for December:
|
Total factory overhead incurred
|
$40,000
|
|
Variable overhead expenses, incurred
|
$24,150
|
|
Fixed overhead expenses, budgeted
|
$18,000
|
|
Direct labor hours (DLH) worked
|
4,200
|
|
Standard direct labor hours allowed for the units manufactured
|
4,000
|
|
Practical capacity, in direct labor hours
|
4,500
|
|
Standard variable overhead rate per DLH
|
$5.00
|
Swinney uses direct labor hours to apply factory overhead.
Required: Use the framework presented in Exhibit to compute the following for the month of December:
1. Variable overhead spending variance.
2. Variable overhead efficiency variance.
3. Fixed overhead spending (budget) variance.
4. Fixed overhead production-volume variance.
5. Total overhead variance.