Oliver Corporation Uses a Standard Cost System When Accounting for Its

question 66

Essay

Oliver Corporation uses a standard cost system when accounting for its sole product. Planned production is 70,000 process hours per month, which gives rise to the following per-unit standards:
Variable overhead: 15 hours at $15 per hour
Fixed overhead: 15 hours at $8 per hour
During March, 5,100 units were produced and Oliver incurred the following overhead costs: variable, $842,500; fixed, $329,000. Actual process hours totalled 75,000.
Required:
A. Calculate the spending and efficiency variances for variable overhead.
B. Calculate the budget and volume variances for fixed overhead.

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Definitions:

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