Sade Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
The company has reported the following actual results for the product for December:
Required:
a. Compute the variable overhead rate variance for December.
b. Compute the variable overhead efficiency variance for December.
Definitions:
Nonmanufacturing Costs
Expenses not related to the production of goods, such as selling, administrative, and financial costs.
Work in Process
Stock that consists of items that are in the midst of production but have not yet reached completion.
Job-order Costing
A cost accounting system that assigns manufacturing costs to an individual product or batches of products, ideal for customized orders.
Work in Process
Inventory that includes goods partially completed but not yet ready for sale, situated between raw materials and finished goods.
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