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Two-Variance Approach

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OP co. applies overhead based on direct labor hours & has the following available for November:

STANDARD:
Direct labor hours per unit are 5,
Variable overhead per DLH are $0.75,
Fixed overhead per DLH
(based on 8,900 DLH's)is $1.90

ACTUAL:
Units produced are 1,800,
Direct Labor hours are 8,900,
Variable overhead is $6,400,
Fixed overhead is $17,500

Compute all the appropriate variances using the TWO-VARIANCE approach.

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Solution Summary

The solution computes all the appropriate variances using the two-variance approach.

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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