60.1K

Verified Solution

Link Copied!

Exercise 9-6 (Algo) Variable Overhead Variances (LO9-6] Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items cattled by its dot.com clients. When a client receives an order from a customer the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct lobor hours In the most recent month, 140,000 items were shipped to customers using 5,300 direct labor-hours. The company incurred a total of $15.900 in variable overhead costs. According to the company's standards, 0,03 direct labor hours are required to fulfill an order for one item and the variable overhead rate is $3.05 per direct labor-hour Required: 1. What is the standard labor houts allowed (SH) to ship 140.000 items to customers? 2. What is the standard variable overhead cost allowed (SHSR) to ship 140.000 items to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficiency variance? (For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (t.e., zero variance). Input all omounts os positive values. Do not round intermediate calculations.) 1. Standard quantity of labor hours allowed 2 Standard variable overhead cost allowed 3. Vanable overhead spending variance 4 Variable overhead rale variance 4. Variable overhead efficiency variance

Answer & Explanation Solved by verified expert

See Answer