Calcagno Corporation's Variable Overhead Is Applied on the Basis of Direct

question 116

Essay

Calcagno Corporation's variable overhead is applied on the basis of direct labor-hours. The company has established the following variable overhead standards for product B47W:

The following data pertain to the most recent month's operations during which 520 units of product B47W were made: Required:
a. What was the variable overhead rate variance for the month?
b. What was the variable overhead efficiency variance for the month?

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Definitions:

Vouchers Payable

An accounting term for records of payable amounts for goods or services received, pending payment to suppliers.

Balance Sheet

A financial statement that presents the financial position of a company at a specific point in time, showing assets, liabilities, and shareholders' equity.

Accounts Payable

Liabilities representing the amount a company owes to suppliers for goods and services purchased on credit.

Controlling Account

The account in the general ledger that summarizes or controls a subsidiary ledger. Example: The Accounts Payable account in the general ledger is the controlling account for the accounts payable subsidiary ledger. After postings are complete, it shows the total amount owed from purchases made on account.