Basic Overhead Variances Derf Company Applies Overhead on the Basis of Direct Labor

question 1

Essay

Basic Overhead Variances
Derf Company applies overhead on the basis of direct labor hours.Two direct labor hours are required for each product unit.Planned production for the period was set at 9,000 units.Manufacturing overhead for the period is budgeted at $135,000,of which 20 percent is fixed.The 17,200 hours worked during the period resulted in production of 8,500 units.Manufacturing overhead cost incurred was $136,500.
Required:
Calculate the following three overhead variances:
a.Overhead volume variance.
b.Overhead efficiency variance.
c.Overhead spending variance.

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Definitions:

Tax

A mandatory monetary fee or different kind of charge levied on a taxpayer by a government entity to support government expenditures and various public costs.

Tax Revenue

The income that is gained by governments through taxation, which is used to fund public services and government obligations.

Tax

A compulsory financial charge imposed by a government on individuals or entities to fund public expenditures, providing revenue for government functions.

Elasticities

Measures in economics that indicate how changes in one variable, such as price or income, affect a change in another variable, such as demand or supply.