The following data have been provided by Lopus Corporation:

  150. The following data have been provided by Lopus Corporation:

           

	Budgeted production.................................	2,600	units
	Standard machine-hours per unit...............	2.7	machine-hours
	Standard lubricants....................................	$4.20	per machine-hour
	Standard supplies.......................................	$2.90	per machine-hour
	Actual production......................................	2,900	units
	Actual machine-hours................................	8,080	machine-hours
	Actual lubricants (total).............................	$35,151
	Actual supplies (total)...............................	$23,038

            Required:

           

            Compute the variable overhead spending variances for lubricants and for supplies. Indicate whether each of the variances is favorable (F) or unfavorable (U). Show your work!

            Ans: 

	Cost Formula (per machine-hour)	Actual Costs Incurred 8,080 Machine-Hours	Flexible Budget Based on 8,080 Machine-Hours	Spending Variance
Lubricants......	$4.20	$35,151	$33,936	$1,215 U
Supplies.........	$2.90	$23,038	$23,432	$394 F

           

    151. Osika Corporation, which makes helicopter rotors, has provided the following data for November:

           

	Budgeted production.................................	3,300	rotors
	Actual production......................................	3,500	rotors
	Standard machine-hours per rotor.............	8.7	machine-hours
	Budgeted machine-hours (8.7 × 3,300).....	28,710	machine-hours
	Standard machine-hours allowed for the actual output (8.7 × 3,500).....................	30,450	machine-hours
	Actual machine-hours................................	31,010	machine-hours

	Budgeted variable overhead cost per machine-hour:
	Indirect labor...........	$1.00	per machine-hour
	Power......................	$2.50	per machine-hour
	Actual total variable overhead costs:
	Indirect labor...........	$32,673
	Power......................	$70,913

            Required:

           

            Prepare a variable overhead performance report in good form showing the total variances, the spending variances, and the efficiency variances.

            Ans: 

           

Osika Corporation
Variable Overhead Performance Report
For the Month Ended November 30
Budgeted machine-hours.........................	28,710
Actual machine-hours.............................	31,010
Standard machine-hours allowed............	30,450

Variable overhead costs:	Cost Formula (per machine-hour)	(1) Actual Costs Incurred 31,010 Machine-Hours	(2) Flexible Budget Based on 31,010 Machine-Hours	(3) Flexible Budget Based on 30,450 Machine-Hours
Indirect labor............................	$1.00	$32,673	$31,010	$30,450
Power........................................	2.50	70,913	77,525	76,125
Total..........................................	$3.50	$103,586	$108,535	$106,575

Variable overhead costs:	Total Variance (1) − (3)	Spending Variance (1) − (2)	Efficiency Variance (2) − (3)
Indirect labor............................	$2,223 U	$1,663 U	$560 U
Power........................................	5,212 F	6,612 F	1,400 U
Total..........................................	$2,989 F	$4,949 F	$1,960 U

           

    152. Koppa Corporation, which makes skylights, has provided the following data for January:

           

	Budgeted production.................................	6,100	skylights
	Actual production......................................	6,300	skylights
	Standard machine-hours per skylight........	6.6	machine-hours
	Actual machine-hours...............................	42,120	machine-hours

	Budgeted variable overhead cost per machine-hour:
	Indirect labor.........	$5.90	per machine-hour
	Power.....................	$1.00	per machine-hour
	Actual total variable overhead costs:
	Indirect labor.........	$268,306
	Power.....................	$41,922

            Required:

           

            Prepare a variable overhead performance report in good form showing the total variances, the spending variances, and the efficiency variances.

            Ans: 

           

Koppa Corporation

Variable Overhead Performance Report

For the Month Ended January 31

Budgeted machine-hours (6.6 × 6,100)................................................	40,260
Actual machine-hours...........................................................................	42,120
Standard machine-hours allowed for the actual output (6.6 × 6,300)..	41,580

Variable overhead costs:	Cost Formula (per machine-hour)	(1) Actual Costs Incurred 42,120 Machine-Hours	(2) Flexible Budget Based on 42,120 Machine-Hours	(3) Flexible Budget Based on 41,580 Machine-Hours
Indirect labor...................	$5.90	$268,306	$248,508	$245,322
Power...............................	1.00	41,922	42,120	41,580
Total.................................	$6.90	$310,228	$290,628	$286,902

Variable overhead costs:	Total Variance (1) − (3)	Spending Variance (1) − (2)	Efficiency Variance (2) − (3)
Indirect labor...................	$22,984 U	$19,798 U	$3,186 U
Power...............................	342 U	198 F	540 U
Total.................................	$23,326 U	$19,600 U	$3,726 U