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10.- Variable Overhead Variances, Service Company Rostand Inc. operates a delivery service for over 70...

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Accounting

10.-

Variable Overhead Variances, Service Company

Rostand Inc. operates a delivery service for over 70 restaurants. The corporation has a fleet of vehicles and has invested in a sophisticated, computerized communications system to coordinate its deliveries. Rostand has gathered the following actual data on last years delivery operations:

Deliveries made 38,600
Direct labor 31,000 direct labor hours @ $14.00
Actual variable overhead $157,700

Rostand employs a standard costing system. During the year, a variable overhead rate of $5.10 per hour was used. The labor standard requires 0.80 hour per delivery.

Required:

1. Compute the standard hours allowed for actual deliveries made last year. fill in the blank 1 direct labor hours

2. Compute the variable overhead spending and efficiency variances. Enter amounts as positive numbers and select Favorable or Unfavorable.

Spending variance $fill in the blank 2
FavorableUnfavorable
Efficiency variance $fill in the blank 4

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