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# Crystal Glassware Company: Variances

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Crystal Glassware Company has the following standards and flexible-budget data.

Standard variable-overhead rate.............. \$6.00 per direct-labor hour
Standard quantity of direct labor............ 2 hours per unit of output
Budgeted output.............................. 25,000

Actual results for April are follows:
Actual output................................ 20,000 units
Actual direct labor.......................... 50,000 hours

Use the variance formulas to compute the following variances. Indicate whether each variance is favorable or unfavorable, where appropriate.

#### Solution Preview

(1)
Variable overhead spending variance = actual variable overhead costs - (standard variable-overhead rate * actual hours of labor used) = \$320,000 - \$6.00 per direct-labor hour * 50,000 hours = \$20,000, which is unfavorable since the actual overhead costs exceeds the budgeted amount.

(2)
Variable Overhead Efficiency Variance = (actual labor-hours - standard labor-hours allowed for actual ...

#### Solution Summary

This response analyzes the variances of Crystal Glassware Company.

\$2.19