The Following Information Relates to Joplin Company for the Period

Essay

The following information relates to Joplin Company for the period just ended:
A.Calculate the spending and efficiency variances for variable overhead.
A.Spending variance: $37,000 - (40,500 * $1)= $3,500F
Efficiency variance: (40,500 *$1)- (82,000 * 0.5* * $1)= $500F
*Two units per hour = 0.5 hours per unit
B.Budget variance: ($121,000 - $37,000)- (40,000 * $2)= $4,000U
Volume variance: (40,000 * $2)- (82,000 *0.5* *$2)= $2,000F**
* Two units per hour = 0.5 hours per unit
**Some accountants choose to label a negative volume variance as "favorable," while others prefer to omit the unfavorable/favorable label altogether.
B.Calculate the budget and volume variances for fixed overheaD.