Question: Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last year's delivery operations:
Deliveries made 38,600
Direct labor 31,000 direct labor hours @ $9.00
Actual variable overhead $157,700
Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery. Variable Overhead Variances, Service Company Refer to the information for Rostand Inc. above.
Required:
1. Compute the standard hours allowed for actual deliveries made last year.
2. Compute the variable overhead spending and efficiency variances.