Hi I just need help with number 6 with the “total overhead spending variance.” To find this, I thought you just need to use 1330000-180000= 1150000 but thats not right. Please help, thank you in advance. I have also attached my scratch sheet.
Problem 15-51 Standard Cost Variance Analysis and Interpretations (LO 15-2] Glavine & Co. produces a single product, each unit of which requires three direct labor hours (DLHs). Practical capacity (for setting the factory overhead application rate) is 60,000 DLHs, on an annual basis. The information below pertains to the most recent year: Standard direct labor hours (DLHS) per unit produced Practical capacity, in DLHs (per year) Variable overhead efficiency variance Actual production for the year Budgeted fixed manufacturing overhead Standard direct labor wage rate Total overhead cost variance for the year Direct labor efficiency variance 3.00 60,000 $ 20,000 unfavorable (U) 17,000 units $1,200,000 $ 20.00 per DLH $ 200,000 favorable (F) $ 40,000 unfavorable (U) Required: 1. What was the actual number of direct labor hours (DLHs) worked during the year? 2. What was the standard variable overhead rate per DLH during the year? 3. What was the total overhead application rate per direct labor hour (DLH) during the year? 4. What was the total actual overhead cost incurred during the year? 5. What was the Production Volume Variance for the year? Was this variance favorable (F) or unfavorable (U)? 6. What was the total Overhead Spending Variance for the year? Was this variance favorable (F) or unfavorable (U)? Answer is complete but not entirely correct. 1. DLHS per DLH per DLH Actual number of direct labor hours Standard variable overhead rate Total standard overhead rate Total actual overhead cost Fixed overhead production volume variance Total overhead spending variance 53,000 $ 10 30 $ 1,330,000 $ 180,000 $ 1,150,000 Unfavorable Favorable L. De efficiency Vanare. I SRCAH-SH) 40,000:20 CAH-, 17000 43). 40,000/20AH-51000 53000 AH 2. SVOR E A4 SH). 20,000 = SVOR [ 5.3000* ) (17000*3) 20,000 svor 52000-S1000] 20000 – SVOR (2.000) 210 3 1200000 | 60,000 > 20 +10:30. 4- 200000 = Actral -130 ( 17000 +3) – 15300 -200000 115 30000 133evov .. 5 (17000K 3) x 20 = 10200 00 ( 12000co) F 180000