Compass Company Uses Labor Hours to Allocate Its Variable Overhead

question 112

Essay

Compass Company uses labor hours to allocate its variable overhead costs.Mr.Dailey,the production manager has been told that his direct labor and variable overhead variances for the past month were as follows:
T $$\begin{array} { | l | c | } \hline \text { Direct labor rate variance: } & \$ 3,000 \mathrm {~F} \\\hline \text { Direct labor efficiency variance: } & \$ 6,000 \mathrm { U } \\\hline \text { Variable overhead spending variance: } & \$ 2,000 \mathrm { U } \\\hline \text { Variable overhead efficiency variance: } & \$ 3,000 \mathrm { U } \\\hline\end{array}$$ he production V.P.has asked Mr.Dailey to account for his overhead variances for the month.Required:
Explain the meaning of the two variable overhead variances and Mr.Dailey's responsibility for them.

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Definitions:

Sterile Procedure

Medical or surgical processes carried out under conditions designed to prevent infection, involving sterilized equipment and environments.

Sterile Instrument

A tool or device that has been made free from all forms of microorganisms, including spores, and is safe for use in medical procedures.

Sterile Saline Solution

A salt solution treated to eliminate microbes, used in medical procedures and wound cleaning.

Reaching Over

The act of extending an arm or part of the body over an obstacle or towards something, often implying exertion or stretching.