The Management of Kaplan Enterprises Is Analyzing Variable Overhead Variances

Essay

The management of Kaplan Enterprises is analyzing variable overhead variances for the fiscal period just ended. During the period, Kaplan's management used 5,000 hours of direct labor. It had budgeted to use 8,000 hours of direct labor. Hours of direct labor is the single overhead driver of variable overhead. Variable overhead consists of two items. Indirect labor was budgeted as $2.00 per hour of direct labor. Indirect materials was budgeted as $1.00 per hour of direct labor. Actual variable overhead was $30,000.
Calculate Kaplan's variable overhead spending variance.