Variable overhead variancesmorgan tax company considers 6,000 direct labor hours or 300 tax returns its normal monthly capacity. its standard variable overhead rate is $9 per direct labor hour. during the current month, $45,400 of variable overhead cost was incurred in working 5,600 direct labor hours to prepare 270 tax returns. determine the following variances, and indicate whether each is favorable or unfavorable: determine the following variances: do not use negative signs with any of your answers. next to each variance answer, select either "f" for favorable or "u" for unfavorable. variable overhead variancesactual cost: $answer split cost: $answer standard cost: $answer a. variable overhead spending $answer answerfub. variable overhead efficiency $answer answerfu

Capacity Variance or volume variance. 3,600U

Efficiency 1,800U

Spending 5,000U

Explanation:

OVERHEAD-THREE VARIANCE METHOD

Efficiency:

Difference between expected hours and actual hours.

Actual hour based on standard rate - Standard hour based on standard rate

6,000 / 300 = 20 hours per tax return

270 tax return x 20 = 5,400

actual hours               5,600

(5,400 - 5,600 ) 9 =1,800 U

Spending Variance

The difference between the expected overhead and the actual cost for overhead

Actual variable overhead: 45,400

expected overhead 5,600 x 9 = 50,400

50,400 - 45,400 = 5,000

Capacity Variance or volume variance.

Difference for overabsorption or underabsorption because difference in actual hours and normal capacity

Company's normal capacity: 6000 DL

Actual Direct Labor hour  5,600

(5,600 - 6,000) x 9 = 3,600U

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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