Question - Variable cost variances: Sills, Inc.
The following data reflect the current month's activity for Sills, Inc.
Actual total direct labor.................................................................................. $546,000
Actual hours worked............................................................................................ 26,000
Standard labor-hours allowed for actual output (flexible budget.................27, 000
Direct labor price variance................................................................................... $19,500U
Actual variable overhead..................................................................................... $132,600
Standard variable overhead rate per standard direct labor-hour................. $5.25
Variable overhead is applied based on standard direct labor-hours allowed.
Required: Compute the labor and variable overhead price and efficiency variances. Show calculations.