The Following Information Relates to the Month of April for the Trolley

question 11

Essay

The following information relates to the month of April for The Trolley Manufacturing Company, which uses a standard cost accounting system.
$\begin{array}{lrr} \text {Actual direct labor hours used } &7,000\\ \text { Standard hours allowed for good output } &7,500\\ \text {Fixed overhead spending variance - unfavorable } &\$300\\ \text { Actual total overhead } &\$16,000\\ \text {Budgeted fixed costs } &\$4,500\\ \text { Normal activity in hours } &6,000\\ \text { Total overhead application rate per DLH}&\$2025\end{array}$

Required:
(Be sure to indicate whether the variances are favorable or unfavorable.)
a. What is the variable overhead efficiency variance?
b. What is the variable overhead price variance?
c. What is the fixed production volume variance?

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Definitions:

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from the central bank's discount window.

Treasury Securities

Government bonds issued by the Treasury of a country, considered low-risk investments since they are backed by the government's credit.

NYSE

The New York Stock Exchange, one of the largest stock exchanges in the world, where stocks of public companies are bought and sold.

NASD

Was a self-regulatory organization for the U.S. securities industry, responsible for regulatory oversight, which is now part of FINRA (Financial Industry Regulatory Authority).