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    Variance Calculation

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    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?

    © BrainMass Inc. brainmass.com June 3, 2020, 7:13 pm ad1c9bdddf
    https://brainmass.com/business/accounting/variance-calculation-90392

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    Solution Summary

    The solution explains how to calculate various overhead variances

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