Beverly Company has determined a standard variable overhead rate of $3.10 per direct labor hour and expects to incur 0.50 labor hour per unit produced. Last month, Beverly incurred 1,250 actual direct labor hours in the production of 2,600 units. The company has also determined that its actual variable overhead rate is $2.40 per direct labor hour. Calculate the variable overhead rate and efficiency variances as well as the total amount of over- or underapplied variable overhead.


Answer 1


Variable overhead rate variance = $ 875 favorable

Variable overhead efficiency variance = $ 4,185 favorable

Variable overhead cost variance = $5,060 Favorable


Standard hours = 1 hr x 2600 units = 2600 hours

Standard rate = $3.10

Actual hours = 1,250 hours

Actual rate = $2.40

Variable overhead rate variance =  ( Standard Rate - Actual Rate ) x Actual Hrs

=  ( $ 3.10 - $2.40 ) x 1250 Hrs

= $0.7 x 1250

=$ 875 favorable

Variable overhead efficiency variance = (Standard hours - Actual hours) x Standard Rate

= (2600 - 1250 ) x $ 3.10

= $ 4,185 favorable

Variable overhead spending variance = Variable overhead rate variance +  Variable overhead efficiency variance

= $875 + $4,185

= $ 5,060 favorable

Variable overhead cost variance = Standard cost - Actual Cost

= (2600 X 3.10) - (1250 X 2.40) = 8,060 - 3000

= $5,060 Favorable

Related Questions

The following information is available regarding the total manufacturing overhead of Olsen Company for a recent four-month period. Machine Hours Mfg. Overhead April 90,000 $ 170,000 May 80,000 $ 153,000 June 110,000 $ 198,000 July 95,000 $ 181,000 Using the high-low method, compute the fixed element of Olsen's
What would the net value of a long straddle position be if the stock price at expiration is $35?
A company wishes to raise $27 million by issuing 15-year semi-annual coupon bonds with face value of $1,000 and coupon rate of 6.60 percent. The bonds will have a yield to maturity of 7.70 percent. Determine the minimum number of these bonds the company needs to issue to raise the desired amount of money.
When a consultant prepared marketing dashboards showing sales data for different household types over a four-year period for Tony's pizza, this was which step of the marketing research approach?
Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $7.7 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $10.5 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.7 million to build, and the site requires $920,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project

Bryan Houlberg expects his C corporation to generate a profit of $200,000. What is Bryan's after-tax cash flow from the corporation if net income after corporate tax is distributed to him as a dividend and his marginal tax rate on ordinary income is 37%?



\$ 117,937.50


Corporate level tax on $200,000 is $61,250

Cash(After Corporate tax)= \$ 200,000 -\$ 61,250=\$138,750

Individual tax on $138,750(15%)=0.15*138750=\$ 20812.5

Hence, net after tax cashflow :

\$ 138,750-\$20,812.5\n=\$117,937.50

Explain what a literature review is.​


It is a paper that presents the current knowledge including substantive findings.

Scott turner has a bond with 10 years to maturity, a face value of $1,000, an 8% interest rate, and a market price of $800. what is the yield-to-maturity on this bond?


The yield to maturity, YTM, is the total return you could get from the bond if you keep the bond until it matures. 

To solve:
Yield to maturity = {($1,000 x 0.08) + [($1,000 - $800/10]}/[($800 + $1,000)/2]
Yield to maturity = 11.11%

Hardy Company has current assets of $95,000, current liabilities of $100,000, long-term assets of $180,000 and long-term liabilities of $80,000. Hardy Company's working capital and its current ratio are: A. -$5,000 and .95:1. B. $5,000 and .95:1. C. -$5,000 and 1.95:1. D. $85,000 and .95:1.



A. -$5,000 and .95:1


Working capital = Current Assets - Current Liabilities

Provided current assets = $95,000

Current Liabilities = $100,000

Working capital = $95,000 - $100,000 = - $5,000

Current Ratio = (Current \: Assets)/(Current\: Liabilities)

Therefore, Current Ratio = (95,000)/(100,000) = 0.95:1

Here working capital is negative $5,000

Current Ratio = 0.95 : 1

Final Answer

A. -$5,000 and .95:1

Tell me tree critical risk that organization are likely to face in determination of requirement


i do not what your talking about

The difference between the small business owner and the entrepreneur is that the entrepreneur:_________ a) assumes the risk of the business manages
b) the business is responsible for the profits of the business
c) is accurately described by all of the above files taxes for the business



Option A


The difference between the small business owner and the entrepreneur is that the entrepreneur "assumes the risk of the business manages" or option A. A entrepreneur is a person who manages and runs a business or businesses taking on more risks as the financial advisor so if we are talking differences of a business owner and a entrepreneur, a entrepreneur understands and takes on the risk of managing the business or businesses while a business owner manages one business not knowing the risk of managing one.

Hope this helps.

Other Questions