Problem:
The following information is for the third quarter of this year:
Planned Actual
Production 92,000 units 87,000 units
Direct labor hours 506,800 DL hrs 380,000 DL hrs
Fixed Manufacturing Overhead $205,000 $182,400
Variable manufacturing overhead $910,000 $841,500
Standard direct labor hour per unit 5.5
Required:
Calculate the following three overhead variances:
a) Overhead volume variance
b) Overhead efficiency variance
c) Overhead spending variance