# Variance Calculation

Layt Clock Company has developed the following flexible budget for its overhead costs. Manufacturing overhead at Layt is applied to production on the basis of standard machine-hours:

(see chart in attached file)

Layt was expecting to produce 22,000 clocks last year. The actual results for the year were as follows:

Number of clocks produced.......... 21,500

Machine-hours incurred................. 24,940

Variable overhead cost.................. $145,899

Fixed overhead cost...................... $170,540

Questions:

1. What is the Variable Overhead Spending Variance?

2. What is the Variable Overhead Efficiency Variance?

3. What is the Fixed Overhead Budget Variance?

4. What is the Fixed Overhead Volume Variance?

5. What is the TOTAL Manufacturing Overhead Variance?

https://brainmass.com/business/accounting/variance-calculation-90392

#### Solution Summary

The solution explains how to calculate various overhead variances