Share
Explore BrainMass

Banner Inc. variable overhead spending and efficiency varia

Banner Inc.bases its variable overhead performance report on the actual direct labor hours of the period. Data concerning the most recent year that ended on Dec. 31 are as follows:
Budgeted direct labor hours 12,000
Actual direct labor hours 13,500
Standard direct laabor hours allowed 13,000

Cost formula (per direct labor hour):
Indirect labor $0.85
Supplies $0.30
Electricity $0.15

Actual costs incurrred:
Indirect labor $11,600
Supplies $ 4,000
Electricity $ 2,050

Management would like to compute both the spending and efficiency variances for variable overhead in the company's variable overhead performance report.
I need help preparing a variable overhead performance report with both the variable overhead spending and efficiency variances. Please show computations to help me to better understand this process.

Attachments

Solution Summary

Your tutorial for variable overhead variance is attached.

$2.19