Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct...
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Accounting
Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct labor hours. Information from LLLs standard cost card follows:
Standard Quantity
Standard Rate
Standard Unit Cost
Variable manufacturing overhead
0.6
$0.80
$0.48
During August, LLL had the following actual results:
Units produced and sold
26,000
Actual variable overhead
$ 9,560
Actual direct labor hours
16,700
Required:
Compute LLLs variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead.
Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).
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