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# Calculations of Various Overhead Variances

Consider the following data regarding factory overhead:

Variable Fixed
Budget for actual hours of input \$45,000 \$70,000
Applied 41,000 64,800
Budget for standard hours allowed
for actual output achieved ? ?
Actual incurred 48,500 68,500

Using the above data, fill in the following blanks with the variance amounts. Use F for favorable or U
for unfavorable for each variance.

Total Overhead Variable Fixed
1. Spending variance ______ ______ ______
2. Efficiency variance ______ ______ ______
3. Production-volume variance ______ ______ ______
4. Flexible-budget variance ______ ______ ______
5. Underapplied overhead ______ ______ ______

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#### Solution Preview

The budget for standard hours allowed for actual output achieved for Variable would be \$41,000 which is the same as applied since it is variable overhead and applies is based on standard hours. The budget for standard hours allowed for actual output achieved for Fixed would be \$70,000 which is the same as budget for actual hours of input since it is fixed overhead.

Spending ...

#### Solution Summary

The solution explains the calculation of various overhead variances

\$2.19