Overhead Variance Analysis

Question 1

What is the formula to calculate variable overhead efficiency variance?

Answer 1

(AQ - SQ) X Standard variable overhead rate

Question 2

Standard direct labor hours per unit x # of units produced = ?

Answer 2

SQ or Standard DL hours

Question 3

Overhead efficiency variance is favorable and unfavorable during the following conditions?

Answer 3

Favorable: SQ > AQ
Unfavorable: AQ > SQ

Question 4

What is the formula to calculate variable overhead spending variance?

Answer 4

(Actual variable cost per hour - Standard variable cost per hour) x AQ

Question 5

Overhead spending variance would be favorable of unfavorable during the following conditions?

Answer 5

Favorable: S Cost > A Cost
Unfavorable: S Cost < A Cost