Augusta Sports manufactures baseball caps. The company uses standards to control costs. The labor standards for one baseball cap are as follows: Standard Hours 15 minutes Standard Rate per Hour $15 per hour The budgeted variable overhead rate is $5 per direct labor hour. During the current month, the company incurred $21,747 in variable manufacturing overhead costs. During the current month, 4,997 direct labor hours were needed to manufacture 20,198 baseball caps. Direct labor costs totaled $102,000 for the month. Compute the variable overhead spending variance. Enter a favorable variance as a positive number. Enter an unfavorable variance as a negative number.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Augusta Sports manufactures baseball caps. The company uses standards to control
costs. The labor standards for one baseball cap are as follows:
Standard Hours
15 minutes
Standard Rate
per Hour
$15 per hour
The budgeted variable overhead rate is $5 per direct labor hour. During the current
month, the company incurred $21,747 in variable manufacturing overhead costs. During
the current month, 4,997 direct labor hours were needed to manufacture 20,198
baseball caps. Direct labor costs totaled $102,000 for the month.
Compute the variable overhead spending variance.
Enter a favorable variance as a positive number. Enter an unfavorable variance as a
negative number.
Transcribed Image Text:Augusta Sports manufactures baseball caps. The company uses standards to control costs. The labor standards for one baseball cap are as follows: Standard Hours 15 minutes Standard Rate per Hour $15 per hour The budgeted variable overhead rate is $5 per direct labor hour. During the current month, the company incurred $21,747 in variable manufacturing overhead costs. During the current month, 4,997 direct labor hours were needed to manufacture 20,198 baseball caps. Direct labor costs totaled $102,000 for the month. Compute the variable overhead spending variance. Enter a favorable variance as a positive number. Enter an unfavorable variance as a negative number.
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