91影视

Direct labor is the cost directly attached to producing goods and services and depends upon the direct labor hours.

$\begin{array}{rcl}\mathbf{Variable}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{cost}\mathbf{}\mathbf{variance}& \mathbf{=}& \left(\mathrm{Actual}\mathrm{cost}-\mathrm{Standard}\mathrm{cost}\right)\mathbf{脳}\mathbf{Actual}\mathbf{}\mathbf{quantity}\\ & \mathbf{=}& \left(\frac{\$10,800}{7,000脳0.20}-\$6\right)\mathbf{脳}\mathbf{7}\mathbf{,}\mathbf{000}\\ & \mathbf{=}& \left(\$7.71-\$6\right)\mathbf{脳}\mathbf{7}\mathbf{,}\mathbf{000}\\ & \mathbf{=}& \mathbf{\$}\mathbf{11}\mathbf{,}\mathbf{970}\mathbf{}\left(U\right)\end{array}$

Working note:

$\begin{array}{rcl}\mathbf{Standard}\mathbf{}\mathbf{variable}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{allocation}\mathbf{}\mathbf{rate}& \mathbf{=}& \frac{\mathbf{Static}\mathbf{}\mathbf{budget}\mathbf{}\mathbf{variable}\mathbf{}\mathbf{overhead}\mathbf{}}{\mathbf{Static}\mathbf{}\mathbf{budget}\mathbf{}\mathbf{direct}\mathbf{}\mathbf{labor}\mathbf{}\mathbf{hour}}\\ & \mathbf{=}& \frac{\mathbf{\$}\mathbf{7}\mathbf{,}\mathbf{800}}{\mathbf{1300}\mathbf{}\mathbf{hours}}\\ & \mathbf{=}& \mathbf{\$}\mathbf{6}\mathbf{}\mathbf{per}\mathbf{}\mathbf{direct}\mathbf{}\mathbf{labor}\mathbf{}\mathbf{hour}\end{array}$

$\begin{array}{rcl}\mathbf{Variable}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{efficiency}\mathbf{}\mathbf{variance}& \mathbf{=}& \left(\mathrm{Actual}\mathrm{quantity}-\mathrm{Standard}\mathrm{quantity}\right)\mathbf{脳}\mathbf{Standard}\mathbf{}\mathbf{cost}\\ & \mathbf{=}& \left(\left(7,000脳0.02\right)-\left(\frac{1,300脳7,000}{1,500}\right)\right)\mathbf{脳}\mathbf{\$}\mathbf{6}\\ & \mathbf{=}& \left(1400-1750\right)\mathbf{脳}\mathbf{\$}\mathbf{6}\\ & \mathbf{=}& \mathbf{\$}\mathbf{2}\mathbf{,}\mathbf{100}\mathbf{}\left(F\right)\end{array}$

Fixed overhead cost variance:

Fixed overhead volume variance:

1. Variable overhead cost variance: This variance is unfavorable and adverse because the actual variable overhead rate is higher than the standard variable overhead rate.
2. Variable overhead efficiency variance: It is favorable because actual direct labor hours used in the production process are less than the standard direct labor hours.
3. Fixed overhead cost variance: fixed overhead cost variance is favorable because the actual fixed cost of the business entity is lower than the established standards.
4. Fixed overhead volume variance: It is favorable because the number of units produced is higher than the established standard.