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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:

    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

    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.