(SOLVED) Otago Stationery Company manufactures cardboard folders The company has developed


Question Description:

$20

Otago Stationery Company manufactures cardboard folders. The company has developed standard overhead rates based on a monthly capacity of 180 000 direct labour hours (DLHs) as follows:
Standard costs per unit (one box of folders):
Variable overhead (2 hours • $3 per DLH) …………………….. $ 6
Fixed overhead (2 hours • $5 per DLH) ………………………… 10
Total ……………………………………………………………. $16
During April, 90 000 units were budgeted for production; however, only 80 000 units were produced. The following data relate to April:
■ Actual direct labour cost incurred was $1567 500 for 165 000 actual hours of work.
■ Actual overhead incurred totalled $1 371 300, of which $511 500 was variable and $860 000 was fixed.
Required:
Prepare two exhibits, similar to Exhibits 05 and 11.6 in the chapter, showing the following variances. State whether each variance is favourable or unfavourable.
1. Variable overhead trending variance.
2. Variable overhead efficiency variance.
3. Fixed overhead budget variance.
4. Fixed overhead volume variance?

Answer

$20