management accounting 6e 425318

overhead variance :manaufacture

Bright Spark Ltd is a manufacture of the electrical switches, and uses a standard costing system. the standard manufacturing overhead costs per seitch are based on labour hours and are as following:

variable overhead (5hours @ $12 per hour) $60

fixed overhead (5 hours @ $18 per hour) 90

total overhead $150

based on capacity of 300000 direct labour hours per month

the following information is available for month of October:

56000 switches were produced, although 60000 switches were budgeted.

275000 direct labour hours were worked at a total cost of $3825000.

variable overhead costs were $3510000.

fixed overhead costs were $5625000

required:

calculate the variable overhead spending and efficiency variance and the fixed overhead budget and volume variance for October. Indicate whether each variance if favourable or unfavourable.