Question 26 Pointe Claire Company applies overhead based on direct labour hours. Two direct labour hours are required for each unit of product.

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Question 26

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Pointe Claire Company applies overhead based on direct labour hours. Two direct labour hours are required for each unit of product. Planned production for the period was set at 8,700 units. Manufacturing overhead is budgeted at $113,100 for the period (20% of this cost is fixed). The 17,070 hours worked during the period resulted in the production of 8,470 units. The variable manufacturing overhead cost incurred was $92,000 and the fixed manufacturing overhead cost was $28,900.

Calculate the variable overhead spending variance for the period.

Variable overhead spending variance$

Unfavourable

Neither favourable nor unfavourable

Favourable

Calculate the variable overhead efficiency (quantity) variance for the period.

Variable overhead efficiency variance$

Favourable

Unfavourable

Neither favourable nor unfavourable

Calculate the fixed overhead budget (spending) variance for the period.

Fixed overhead budget variance$

Unfavourable

Favourable

Neither favourable nor unfavourable

Calculate the fixed overhead volume variance for the period.

Fixed overhead volume variance$

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