ACCOUNTING
Variable cost variances
The following data reflect the current month’s activity for Sills, Inc.:
Actual total direct labor …………………………………………………………. $546,000
Actual hours worked ……………………………………………………………… 26,000
Standard labor-hours allowed for actual output (flexible budget)…. 27,000
Direct labor price variance ……………………………………………………. $ 19,500 U
Actual variable overhead …………………………………………………………. $132,000
Standard variable overhead rate per standard direct labor-hour ……. $ 5.25
Variable overhead is applied based on standard direct labor-hours allowed.
Required:
Compute the labor and variable overhead price and efficiency variances.
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