The Matten Company Has Developed Standard Overhead Costs Based Upon

question 23

Essay

The Matten Company has developed standard overhead costs based upon a capacity of 180,000 direct labor hours:
$\begin{array}{llr} \text { Standard costs per unit: } &\\ \text { Variable portion } & \text {2 hours \( @ \$ 3=\$6 \)}\\ \text { Fixed portion } & \text {2 hours \( @ \$ 5=10 \)}\\&\quad\quad\quad\quad\quad\quad\$16\end{array}$

During April, 85,000 units were scheduled for production; however, only 80,000 units were actually produced. The following data relate to April:
Actual direct labor cost incurred was $644,000 for 165,000 actual hours of work.
Actual overhead incurred totaled $1,378,000; $518,000 variable and $860,000 fixed.
All inventories are carried at standard cost.
Required:
(Be sure to indicate whether the variances are favorable or unfavorable.)
a. Compute the fixed overhead spending (budget) variance.
b. Compute the production volume variance.

---

Definitions:

Evaluation Interviews

are formal discussions between a supervisor and an employee to review performance, set goals, and discuss career development.

Performance Feedback

The process of providing employees with information about their job performance and suggestions for improvement.

360-degree Feedback

A performance appraisal process where an employee receives feedback from all directions - supervisors, peers, and subordinates.

Performance Appraisals

The systematic evaluation of an employee's job performance and overall contribution to an organization, typically involving the assessment of various criteria.